The second quarter of 2013 has shown positive signs of a gradual return to more stable transactional activity following several years of volatility, according to Appleby.
Renewed confidence in offshore transactions and an increase in deals between Q1 and Q2 2013, have been highlighted in the latest Offshore-i Report released today by Appleby, one of the world’s largest providers of offshore legal, fiduciary and administration services. The latest edition of Appleby‘s quarterly report, which provides data and insight on merger and acquisition activity in major offshore financial centres, focuses on the second quarter of 2013.
The Appleby report shows that M&A activity offshore in the second quarter of 2013 presents a relatively positive picture, with both the number of deals completed and their value remaining broadly consistent compared with Q1, suggesting that there may be some stabilisation of transactional activity levels after the volatility of the last few years.
Cameron Adderley, partner and global head of Appleby’s corporate and commercial department, says: "The number of deals has started to form a pattern averaging out around 500 per quarter in five of the last six quarters and so far this year we have seen 493 deals in Q2 and 491 in Q1. We feel comfortable asserting that business confidence is at last returning to the markets.
“At USD64m for Q2, average deal size is higher than it has been for five of the last eight years. The offshore region average is also higher than all other regions except for North America at USD119m and Central and South America at USD109m.
“When we look at the contribution of the top 10 offshore deals to overall activity in Q2, we see that they accounted for just a third of the cumulative deal value overall, as they did in Q1. We believe that this gives further reason for optimism as values for past quarters have been distorted by one-off mega deals. We can now see genuine substance returning to the mid-market and activity returning across the spectrum of business sizes. Transaction sizes show tangible signs of settling at pre-boom levels, on a par with 2006 data, when USD61m was spent on the average transaction.”
Frances Woo (pictured), Appleby’s group chairman, says: "When we look to gauge the relative strength of the offshore markets as compared to other major world regions, this quarter we find these numbers are encouraging with the offshore markets now ranking sixth globally in terms of cumulative deal value, only just behind South and Central America. The offshore market is more active than Oceania, Africa and the Middle East. And when we look at average deal size we again find a source of positive news; here the offshore region ranks third globally, behind only North America and South and Central America in Q2 2013.”
