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2018 M&A Predictor report anticipates a robust year of global deal-making

2018 M&A Predictor report anticipates a robust year

KPMG International’s 2018 M&A Predictor report predicts appetite and capacity for deals expected to increase by 5 percent and 17 percent respectively

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Global deal-making on the rise with strong M&A activity forecast

Global deal making is set to increase for the remainder of 2018 according to KPMG’s Global M&A Predictor with transactions worldwide already topping US$1 trillion by the end of Q1.
  • Predicted appetite and capacity for deals are both expected to increase by 5 percent and 17 percent, respectively.
  • Global activity reflected in Ireland where recent research highlights a significantly higher expected volume of transactions in 2018
  • Cross-sector deals worldwide peak at 53 percent of all deal volume and more than one-third of deal value in 2017 with rebound already underway in 2018 amid strong volume of mid-market deals
  • Geopolitical concerns make a minimal dent on cross-border deals in 2017

May 15, 2018 – KPMG International’s 2018 M&A Predictor report anticipates a robust year of global M&A deal-making in 2018 compared with 2017, when appetite was relatively flat at 1 percent.

Globally, the year is off to an encouraging start and continues what was a strong Q4 in 2017, with M&A deals worldwide in the first quarter of 2018 soaring just past US$1 trillion – a healthy jump from US$749 billion in the first quarter of 2017. Average deal value in the first quarter of this year was also up significantly, rising about 30 percent to a 10-year high of US$124 million and returning above the US$100 million mark seen in 2015-2016.

Speaking about the M&A Predictor, Mark Collins, Partner and Head of Transaction Services at KPMG Ireland said: “The global KPMG Predictor matches our own M&A survey published in January which highlights significantly higher expected volume of transactions in 2018, reflecting the strength of the Irish economy. Both in Ireland and worldwide, we see similar trends where the capital and the appetite for deals definitely exists. CEOs and their boards are keen to ensure that their business does not get left behind. In many cases we see an appetite for cross-sector deal-making - for example in the pursuit of innovation capability or natural synergies where the right deal at the right time can both protect the core business and help future proof the organisation.”

The M&A Predictor is a forward-looking tool that helps forecast worldwide trends in mergers and acquisitions.

Commenting on the situation in Ireland, David O’Kelly, Partner, Corporate Finance, KPMG Ireland said “The relatively positive global outlook for deal activity is reflected here at home. Our own research in January showed that one of the drivers for this higher expected volume is increased activity in the Irish market by private equity. Notwithstanding the risks posed by Brexit, Ireland continues to be seen as an attractive target market given the strong fundamentals in our economy. Agribusiness & food, technology, healthcare and property remain the most likely sectors for significant activity.”

Ends

Media Contacts:

Kelli O’Malley | Communications Manager | KPMG Ireland | Direct +353 1 700 4169 | Mobile +353 87 050 4169 | email: kelli.omalley@kpmg.ie

Notes to Editor:

About the KPMG M&A Predictor

KPMG M&A Predictor looks at the appetite and capacity for M&A deals by tracking and projecting important indicators 12 months forward, including P/E (price/earnings) ratios, a good guide to the overall market confidence, and net debt to EBITDA (earnings before interest, tax, depreciation and amortization) ratios, to gauge the capacity of companies to fund future acquisitions. The Predictor covers the world by sector and region and is produced using data comprising 2,000 of the largest companies in the world by market capitalization. All raw deal data is sourced from CapitalIQ and Dealogic, with further analysis provided by KPMG. Dealogic data is used to provide historical deal trends in order to compare the predictions with actual results.

About KPMG Ireland

KPMG in Ireland is a provider of professional services, offering a range of audit, tax and advisory services to a broad range of domestic and international clients across all sectors of business and the economy. We operate on an all-Ireland basis and have 91 partners and over 2,800 people in offices in Dublin, Belfast, Cork and Galway. Find out more at www.kpmg.ie.

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