David Shine, Partner – Corporate Department at international law firm Paul Hastings, comments on the news that US bound M&A deal activity in May surpassed the previous monthly record set in 2007…
The aggregate dollar amounts are huge and are records, but let’s not forget that the stock markets are also way beyond the highs of earlier M&A booms. So, because most public companies are way more expensive than they have ever been, I think that the focus on dollar size is a bit unexciting.
If, instead, we look at deal frequency, I think we’d find that it is regular, but not frantic like it has been at times in the past. ‘Merger Mondays’, where lots of deals are announced after being negotiated over the weekend, have not been the norm.
I think this is because that even though we all know that the USD is cheap and banks are lining up to lend, targets are very, very expensive. So the deal pace is deliberate and, with a few exceptions, not frantic. The exceptions continue to be healthcare, where companies like Endo and Valiant have been frantic serial acquirers that seem oblivious to pricing considerations.
