Announcing the ABA’s 2017 Private Target Mergers & Acquisitions Deal Points Study

4 Min Read By: Jessica C. Pearlman

IN BRIEF

  • The 2017 Private Target Mergers & Acquisitions Deal Points Study is now available on the Business Law Section M&A Committee’s Market Trends Subcommittee’s web page.
  • M&A Committee membership is free to all Business Law Section members to access the study.
  • Unlike prior iterations, the 2017 study includes more current data, excludes divisional sales, contains new data points, and provides multiyear comparisons.

As chair of the ABA’s Private Target Mergers & Acquisitions Deal Points Study (the Private Target Deal Points Study), I am pleased to announce that we published the latest iteration of the study to the ABA’s website in December 2017.

Congratulations! But Wait. What Exactly Is This Private Target Deal Points Study, Anyway?

The Private Target Deal Points Study is a publication of the Market Trends Subcommittee of the Business Law Section’s M&A Committee. It examines the prevalence of certain provisions in publicly available private target mergers and acquisitions transactions during a specified time period. The Private Target Deal Points Study is the preeminent study of M&A transactions, widely utilized by practitioners, investment bankers, corporate development teams, and other advisors.

The 2017 iteration of the Private Target Deal Points Study analyzes publicly available definitive acquisition agreements for transactions executed and/or completed either during calendar year 2016 or during the first half of calendar year 2017. In each case, the transaction involved a private target acquired by a public buyer, with the acquisition material enough to that public buyer for the Securities and Exchange Commission to require public disclosure of the applicable definitive acquisition agreement.

The final sample examined by the 2017 Private Target Deal Points Study is made up of 139 definitive acquisition agreements and excludes agreements for transactions in which the target was in bankruptcy, reverse mergers, divisional sales (for divisional sales, see the Carveout Study also published by the Market Trends Subcommittee in December 2017), and transactions otherwise deemed inappropriate for inclusion.

Although the deals in the 2017 Private Target Deal Points Study reflect a broad swath of industries, the technology and health-care sectors together made up nearly half of the deals. Asset deals comprised 13.7 percent of the sample, with the remainder either equity purchases or mergers.

Of the 2017 Private Target Deal Points Study sample, 21 deals signed and closed simultaneously, whereas the remaining 118 deals had a deferred closing some time after execution of the definitive purchase agreement.

The transactions analyzed in the 2017 Private Target Deal Points Study were in the “middle market,” with purchase prices ranging between $30 million and $500 million; purchase prices for most deals in the data pool were below $300 million.

The Private Target Deal Points Study Sounds Great! How Can I Get a Copy?

  • All members of the M&A Committee of the Business Law Section received an e-mail alert from me with a link when the study was published. If you are not currently a member of the M&A Committee but don’t want to miss future e-mail alerts, committee membership is free to Business Law Section members, and you can sign up on the M&A Committee’s homepage.
  • The published 2017 Private Target Deal Points Study is available for download by M&A Committee members from the Market Trends Subcommittee’s page on the ABA’s website. Also available at that link are the other studies published by the Market Trends Subcommittee, including the recently released Canadian Public Target M&A Deal Points Study (chaired by Cameron Rusaw), Carveout Transactions M&A Deal Points Study (chaired by Rita-Anne O'Neill), and Strategic Buyer/Public Target M&A Deal Points Study (chaired by Claudia Simon).

How Does the 2017 Private Target Deal Points Study Differ from the Prior Version?

The 2017 version of the Private Target Deal Points Study has a number of features that differentiate it from prior iterations.

  • Data in the 2017 version of the Private Target Deal Points Study is more current:
    • The 2017 version of the Private Target Deal Points Study includes not only 2016 transactions, but also transactions from the first half of 2017.
    • The 2017 version of the Private Target Deal Points Study includes deals signed during those periods, not just deals that closed during those periods.
  • The 2017 version of the Private Target Deal Points Study excludes divisional sales:
    • The Market Trends Subcommittee of the M&A Committee has also published a special study of carveout sales; thus, by excluding them from the 2017 version of the Private Target Deal Points Study, we can better compare results for given data points between the two studies.
  • The 2017 version of the Private Target Deal Points Study contains new data points:
    • There is an entire new section in the 2017 version of the Private Target Deal Points Study regarding representations and warranties insurance, along with correlations to certain data points relating to indemnification.
    • There are other new data points scattered throughout the 2017 Private Target Deal Points Study with “new data” flags (like the sample shown below) to make them easy to spot: 

  • The 2017 version of the Private Target Deal Points Study provides multiyear comparisons:
    • We have been collecting many of the data points for over a decade now, allowing us to display data—and trend lines—over a number of years in the 2017 version of the Private Target Deal Points Study.
    • Please join me in extending a hearty thank you to everyone who worked so hard on this study, from leadership to advisors to issue group leaders to the working groups, all of whom are listed in the credits pages.

For more information, there will be an In the Know webinar covering the Private Target M&A Deal Points Study on March 8, 2018, from 1:00 p.m. to 2:30 p.m. (ET).

ABOUT THE AUTHOR

Seattle, WA

Jessica C. Pearlman

Jessica represents emerging and established companies in various corporate, securities, and finance matters, with an emphasis on mergers and acquisitions for both public and private clients, domestic…

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