Mergers and acquisitions (M&A) activity in the US soared 57% last year from 2013, according to data firm Mergermarket, totaling $1.41 trillion.
Transactions were both more frequent and larger: US firms commanded a 30% higher valuation for the average deal over 2013, while the total number of M&A agreements climbed 22%.
“The inflated deal size was in part due to the sudden attention to US companies from Europe,” Mergermarket’s report stated. “For example, German corporations made three of their largest ever US-based acquisitions during 2014, with all three valued over $12.7 billion.”
Private equity firms took advantage of the seller’s market to exit an all-time record number of investments. In total, US buyout firms reaped $262.1 billion by parting with assets in 958 separate deals, the data showed. In comparison, 2013’s private equity exits amounted to $153.6 billion—more than 70% growth year-on-year.
Goldman Sachs acted as a middleman in an industry-leading 378 M&A deals worldwide, knocking PricewaterhouseCoopers from the top position. The New York-based investment banking giant defended its number one ranking on total deal value, advising on nearly $1 trillion worth of transactions, or 57% more than in 2013.
The extremely hot M&A market boosted business for all but two of the top 20 advisory firms: UBS’ investment banking operations shrunk by 30% between 2013 and 2014, while New York’s Evercore Partners saw an 18% drop.
Along with Goldman Sachs, Citi and Lazard’s investment bankers managed to make the most of 2014. Citi more than doubled its M&A business over the year prior, taking part in deals worth $620 billion, while Lazard’s transactions under advisement grew by 133%.
Bankers may have been dealing with private equity firms more as sellers than buyers in these transactions, according to a Goldman Sachs analysis released mid-2014. While private equity exits hit an all-time high, only 20% of US M&A activity as of last September counted buyout firms as purchasers.
Likewise, during a 2014 earnings call Lazard CEO Kenneth Jacobs acknowledged that the hot market posed difficulties for buyout firms looking to invest.
“One of the challenges for the large sponsors is competing in some of these large strategic deals,” Jacobs said. “I think it’s a little bit harder than it probably was in the last cycle of putting money to work.”
M&A Advisors by Global Deal Value
Source: Mergermarket 2014 M&A Report
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