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Private equity deal values decline for third month in a row

Private equity deal values registered a sharp drop of 30% for the month of August, declining for the third month in a row, even as overall deal activity remained steady, with strong M&A growth driving a 6% y-o-y increase in values, according to the latest deal tracker report by Grant Thornton.

By: | Published: September 17, 2016 6:18 AM
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PE investments continued to decline both in terms of volumes (17% y-o-y) and values (37% y-o-y) due to the absence of big ticket investments.. (PTI Photo)

Private equity deal values registered a sharp drop of 30% for the month of August, declining for the third month in a row, even as overall deal activity remained steady, with strong M&A growth driving a 6% y-o-y increase in values, according to the latest deal tracker report by Grant Thornton.

August witnessed over 134 deals valued at $3.6 billion which was around 40% above the same month last year. On the M&A front, cross-border deal value increased by 45% as compared to August 2015, and there has been an almost three-fold increase in value in domestic M&A, which contributed over $ 2.5 billion this month, Grant Thornton says.

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August 2016 witnessed transactions worth $3.6 billion with a strong 38% y-o-y boost in value while volumes declined by 8% y-o-y. This growth in deal value was driven by eight big-ticket deals valued over $100 million.

The overall M&A market witnessed a significant surge in deal values growing about three fold y-o-y, with intensive domestic and inbound deal activity. PE investments continued to decline both in terms of volumes (17% y-o-y) and values (37% y-o-y) due to the absence of big ticket investments.

As compared to July 2016, the overall deal activity for August 2016 decreased by a considerable 27% m-o-m in value, with fewer big-ticket transactions. (July 2016 witnessed two mega deals valued over a billion dollars while August witnessed none).

However, volumes remained stable compared to July 2016. In terms of a sector spread, BFSI and telecom drove the M&A deal values, together contributing over 55% to total M&A deal values.

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