Global M&A activity for the first quarter of 2017 was robust.  There have been US$1.9 trillion in announced, completed, or pending M&A transactions.  In comparison with Q1 2016, M&A activity increased by an incredible 72%, which is partially due to a weak start of 2016.

In the US, M&A deal activity increased in Q1 2017.  Specifically, the value of M&A transactions was 13.2% above Q1 2016.

In the middle market, there were 2,643 transactions for the quarter, the best first quarter since 2007.

Internationally, European M&A in the first quarter increased 16%, in comparison to the same period in 2016, to US$215.3 billion.  This transaction value was the best first quarter since 2008.  British M&A activity remained relatively strong in the first quarter of the year despite expectations of a slowdown ahead of the country's exit from the European Union.

M&A involving Asian companies fell 39% in the first quarter of 2017 to US$176 billion, the lowest level in nearly three years.  Tighter regulations in China have made it tougher for Chinese firms to launch takeovers overseas, which had a major impact on the region's overall deal-making in the first quarter.

There are a number of strong contributing factors to increasing M&A activity this year. First, sales and earnings growth is continuing, which portrays strong aggregate demand.  Rising demand encourages CEOs to make acquisitions to expand their businesses.  In addition, companies need to demonstrate growth to shareholders, which provides another reason to make acquisitions.  Second, the slowdown in emerging markets is forcing multinationals to find new avenues of growth.  M&A is actually the quickest route to growth.  Sometimes, it’s easier and less risky than innovation or cost-cutting.  Third, technology is also driving M&A activity.  Disruptive industries such as Artificial Intelligence, FinTech, and the Internet of Things are all continuing to contribute to M&A activity.

To summarize, overall, the M&A outlook for the rest of 2017 looks very favorable.

Written by Donald Grava

27 April 2017

Versailles Group, Ltd.

Versailles Group is a 30-year-old boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987. 

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President - Versailles Group, Ltd.

+617-449-3325

Global M&A Has Best January Since 2000

 2016 Global M&A in Review – US Led the Way

In 2016, there were 96,665 M&A transactions closed with an aggregate value of US$4,734 billion.  In terms of deal value, 2016 was the third best year since 2007, significantly higher than any other year and only slightly surpassed by 2014, the second best year when US$4,802 billion of transactions were completed.  That being said, 2016’s M&A activity was definitely lower than 2015.

Global M&A Activity by Volume and Value

In 2016, the US once again topped the rankings by both volume and value.  Specifically in terms of deal value, US$1,617 billion of transactions were closed during the year.  Some of this activity can be attributed to the burst of mega deals led by Time Warner’s US$109 billion acquisition by AT&T, which was the largest transaction in the US, the second largest M&A deal globally, and one of the only two global deals worth over US$100 billion during the year.

Following the US’ leading position, China was second with a value of US$789 billion. The largest deal by value involving Chinese targets was the transaction between China National Petroleum Corporation and Jinan Diesel Engine in a reverse takeover worth US$11 billion in December.  Chinese companies completed ten of the top 20 deals in Asia-Pacific in 2016.

The UK was third with US$420 billion of transactions. The largest deal by value in the UK involved Anheuser-Busch InBev’s US$124 billion acquisition of SABMiller, which was also the largest globally.

With strong M&A performance in the US, China, UK and other countries combined with an environment that is conducive to M&A, sellers or buyers should have the confidence to embark on a transaction in 2017.

Candidly, now is the best time to make plans to complete a transaction in 2017.  Sellers should act before buyers/investors’ investment plans and funds have been devoted to other transactions.  Buyers should take advantage by identifying the highest quality targets and moving on them quickly to avoid competitive bidding situations.

Versailles Group, Ltd.

Versailles Group is a 30-year-old boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987. 

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President - Versailles Group, Ltd.

+617-449-3325

7 February 2017

M&A in 2017 

The chart above depicts M&A activity by value.  As you will note, 2016 was about 16% lower than 2015 even though it was the third busiest year ever.

M&A in 2017, for a number of reasons, is projected to be robust and will probably be a record year for several reasons, including:

► In 2016 private equity firms raised almost US$250 billion for acquisitions, which is now available.

► Large corporates worldwide are still "sitting" on very large amounts of cash that they need to deploy.

► The new US President is expected to make some fundamental changes that will be business friendly.

► Buyers and sellers are expected to take advantage of current market conditions.

► The low growth economy encourages the use of M&A as a tool to grow a company, acquire technology or R&D, etc.

► Interest rates are still low, but are expected to increase over time - motivating buyers to move sooner rather than later.

►Looming economic uncertainty is motivating buyers and sellers to complete transactions.

►Sellers worries about valuations, which were an impediment in 2016, have been alleviated.  Now, sellers are becoming worried that if they don't complete a transaction in the near term, they may miss the "window."

M&A Outlook for 2017

M&A activity, in 2017, is expected to pick up dramatically for four reasons.  First, the strong equity markets are generating optimism as they are usually a leading indicator.  Second, in a recent survey, an unprecedented number of business owners or executives claimed they are planning an M&A transaction in the next 12 months. Third, many domestic and European companies have accumulated large cash balances that are available for acquiring new businesses.  Fourth, private equity firms are sitting on a record US$1.1 trillion in un-invested capital and are expected to boost the number of completed transactions globally.

It’s expected that the North America M&A market will be strong for the next three years, particularly in the US.  However, M&A transactions in the US will peak at US$1.5 trillion in 2017, which is indicated in the chart below. 

Logically, sellers should take advantage of 2017’s robust forecast.

On a global scale, US$2.7 trillion of M&A transactions were completed in 2015.  It’s been forecasted that US$3 trillion of M&A transactions will be closed in 2016.  In 2017, it’s expected to increase, again, to US$3.4 trillion.

With regard to the European market, inbound M&A transactions, by US companies taking advantage of a stronger US dollar, are expected to increase.  The UK, Germany and Spain are the most attractive investment destinations, while France and Italy remain less interesting.

On the other side of the world, the re-emergence of Asia as one of the world’s most dynamic growth stories is steady and striking.  China Yuan’s depreciation and the bursting asset bubble have spurred increasing outbound activities by Chinese buyers into neighboring Asian countries as well as developed countries.  At the same time, the Chinese Government is starting to control this outbound activity, which may alter some of this activity.

Lastly, the Africa and Middle East markets are worth paying attention to as oil prices rebounded after OPEC announced production cuts. A recovery in oil prices will enable more available funding, which subsequently may boost deal-making activities in the region.

Versailles Group, Ltd.

Versailles Group is a 30-year-old boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987. 

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President - Versailles Group, Ltd.

+617-449-3325

15 December 2016

M&A - An Effective Tool To Enhance Growth

Mergers and acquisitions are an effective and efficient substitute for R&D for companies that need help combating shrinking market share or stagnant growth. In some cases, companies are confronted with fierce competition from startups and utilize M&A as a way to “outsource” R&D and leave the risk of innovation to startups that tend to excel at R&D. Many of these companies are skipping R&D almost entirely by acquiring other companies. This trend is true in almost all industries and many of the transactions are cross-border.

The chart below depicts the top three sectors for cross-border M&A.

In recent months, Samsung has been actively involved in M&A deal making as a way to instantly build up its capabilities in emerging technologies such as mobile payments, cloud-based services, and artificial intelligence.

Samsung’s planned purchase of U.S. autoparts supplier Harman International Industries Inc. for US$8 billion in an all-cash deal that instantly makes Samsung a major player in the world of automotive technology. It’s an excellent example of a company that is using M&A to expand. This deal will be South Korean smartphone maker’s biggest acquisition in history.

M&A in general and cross-border M&A in particular, is a well-proven way to enhance shareholder value, either by acquisitions or divestitures. While most of the press is focused on the large transactions, middle-market companies can also utilize this “tool” to make defensive or offensive acquisitions or divest businesses that no longer fit the company’s strategy.

The chart below demonstrates the growth of cross-border M&A deals from Q2 2016 to Q3 2016.

Versailles Group is a 30-year-old Boston-based investment bank that specializes in international mergers, acquisitions, and divestitures.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million.  Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987.  

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President

+617-449-3325

November 25, 2016

Record October for M&A Deals 

Reflects Current Market Conditions

The US M&A market is on a roll, which is good news for both sellers and buyers in the middle market.  

A series of high-profile deals announced in October makes it the biggest month ever for M&A transactions and even surpassed the epic deal making surge in January 2000. Mega deals are driving activity and are almost too numerous to count, e.g., the oil-and-gas business combination of General Electric and Baker Hughes, the telecom tie-up of Century Link and Level 3, and AT&T’s acquisition of Time Warner, etc.

Another good example in the global semiconductor sector is Qualcomm’s US$47 Billion acquisition of NXP Semiconductors, which notched the biggest semiconductor targeted M&A deal on record globally.

Top 5 Global Tech Targeted M&A Deals on Record

So far this year, US$1.6 Trillion of M&A transactions has been announced in the domestic market.  It reflects easy financing conditions, more confidence in the economic and business outlook, and keen foresight on the part of management teams.

The current economic environment of low interest rates and high stock prices have encouraged deal making.  Cheap borrowing costs makes it easy to finance deals, while high stock prices provide companies with higher valuations.  

With unprecedented economic conditions, owners of middle market businesses, in particular, have a continued incentive to start or keep doing deals.

Versailles Group is a 30-year-old Boston-based investment bank that specializes in international mergers, acquisitions, and divestitures.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million.  Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987.  

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President

+617-449-3325

November 15, 2016

Global M&A Rebounds With Newfound   Attractiveness in Europe

With mega deals leading the market, the global M&A market showed signals of rebounding in Q3.  Compared to US$1.0 trillion in Q1 and US$1.1 trillion in Q2, the value of global M&A increased to US$1.2 trillion in Q3, marking the second consecutive quarterly improvement.  In all there were 19,416 transactions announced during Q3 and 11 transactions valued at more than US$10 billion each.

Regarding deal value, the US led the market, followed by UK, China, Canada and India.  US companies remain top attractions for global investors as US$416 billion of deals were completed with US targets in Q3.  These US transactions accounted for 40% of the global market and were more than double the deal value of either the UK or China.  

The chart below shows the top five global target countries by deal value.

In terms of volume, most of the M&A deals were concentrated in US, followed by China, UK, Canada and Germany, continuing the trend for the first half of 2016. 

It is worth noting that M&A activities in Germany have remained resilient in the face of slower growth and tremendous volatility in the global market, with both the volume and value of transactions remaining close to the 2015 peak level.  What made Germany stand out in the global M&A market rankings is the giant US$132 billion deal between SABMiller and AB InBev, which is the largest deal by value in Q3 worldwide.

Interestingly, the ever-increasing deal value in UK is bucking the trend in global M&A market.  Since the Brexit vote, there have been rumors that the level of mergers and acquisitions activities across Europe would be threatened; however, the positive M&A data in Q3 2016 signaled newfound attractiveness of European M&A.

Versailles Group is a 30-year-old Boston-based investment bank that specializes in international mergers, acquisitions, and divestitures.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million.  Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987.  

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President

+617-449-3325

November 1, 2016

The importance of M&A As a Tool to Adapt to Changing Business Environments

To succeed in the current business environment companies will need to develop a keen sense of agility to grapple with the slow and uncertain economy, political risks, the threat from new entrants with more creative and efficient business models, etc.  It is widely recognized by CEOs that to respond to today’s marketplace organic growth is far from enough because most transformational technologies are outside the core competency of the average organization.  According to KPMG, CEOs are pursuing a range of activities in search of growth, which are listed below.  For each activity, the percentage indicates what percentage of CEOs will think about that particular action.

M&A, including minority investments, is expected to play a major role as companies search for new and valuable business solutions. Companies that are able to be proactive in terms of technological and business model disruptions will greatly enhance their chances of success, profitability, and longevity.  With regard to the US presidential election, and as Warren Buffet said, the market will move forward with either candidate who happens to get elected as President.  The country will survive and business will survive.  Succinctly, M&A will go on regardless of political uncertainty.

Versailles Group is a 30-year-old Boston-based investment bank that specializes in international mergers, acquisitions, and divestitures.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues between US$2 million and US$250 million.  Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987.  

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President

+617-449-3325

October 4, 2016

Transportation and Logistics

High Growth Sector for M&A

The transportation and logistics (“T&L”) sector is experiencing substantial growth in global M&A activity.  This sector had a strong Q1 2016, and activity increased in Q2.  By volume, the number of deals in Q2 was 6% greater than Q1.  The average deal value was also high during Q2 at almost US$670 million, and compared to Q1, was 20% higher.  Over the past few years, deal value for this sector has been steadily increasing. The average deal value in 2016 is 25% higher than the average for the past three years.

A major factor in the consistent increase in T&L activity is the current high level of M&A activity in Asia, in general, an in China, in particular.  Asia has been a leader in this sector for deals over the past few years.  As seen in the charts below, for the first half of 2016, Asia maintained a strong lead over other regions, in both deal value and volume, accounting for more than 50% of both measures.  Additionally, in terms of both volume and value, financial buyers lag far behind strategic buyers in completing T&L mergers and acquisitions.  Many of the companies within the T&L sector are looking to diversify across sub-sectors, which has also caused an increase in M&A demand from industry buyers.

During the first half of 2016, there were five mega deals completed in transportation and logistics, which totaled US$26.7 billion.  The largest deal within the T&L sector was in the trucking sub-sector.  Deal value in trucking increased 69% in Q2 2016, as compared to the same quarter in the previous year.  In Q2 2016, Logistics was the second largest sub-sector, followed by shipping, with deal values of US$5.8 billion and US$923 million, respectively.  Overall, the largest transaction during the first half of 2016 was Maanshan Dingtai Rare Earth & New Materials Co.’s acquisition of SF Holding Co. for US$16.8 billion.

Worldwide, mergers and acquisitions in the transportation and logistics sector is expected to continue growing.  Corporations are currently seeking to outsource logistics that are heavily based in advanced technology.  The expansion of world trade and e-commerce will continue to drive this demand.  All in all, global M&A activity in the transportation and logistics sector should remain strong for at least the next five years and many are confident the activity will continue to grow across all sub-sectors.  T&L merger and acquisitions activity in the US is also expected to increase.

Versailles Group is a 30-year-old Boston-based investment bank that specializes in international mergers, acquisitions, and divestitures.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues between US$2 million and US$250 million.  Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987.  

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President

+617-449-3325

September 23, 2016