Elevated Industry M&A Activity: Through the first quarter of 2011, 90 M&A deals were announced, representing a 30% increase over levels seen through the first quarter of 2010. From 2007 to 2010, 28% of total deals were announced in the first quarter. Should this same trend continue in 2011, we are on pace for 321 total deals in 2011, surpassing the record-breaking levels of 2008 (303 deals), and exceeding our forecast for 270–285 deals in 2011.

Global M&A Activity: Quarter 1

Global M&A Activity: 2000-2011

Surging Interstate Transactions: In 2011, just under two-thirds (64%) of domestic deals have occurred across state lines, representing the highest level of interstate activity since 2006. While we anticipated that the levels of interstate M&A activity would return to prior recessionary levels, we certainly did not expect it to occur this quickly and rather forecasted that it would be a gradual over the next 24 months. Given that this is potential evidence that the industry is returning to growth-focused M&A as opposed to defensive deal-making in recent recessionary-driven years, this statistic is certainly worth monitoring closely in the months to come.

Interstate M&A Activity: 2000 through 2011

Interstate M&A Activity

Privately-Held Firms Driving More Domestic M&A Activity in 2011: In the first quarter of 2011, 36.7% of total global deals involved a publicly-traded buyer, falling just short of the previous high of 37% observed in 2008. Domestically, however, this trend was not mirrored, as only 13% of total domestic sales involved a publicly-traded buyer in the first quarter of 2011, down markedly from 24% and 30% for 2010 and the first quarter in 2010, respectively.

Given a need and desire to achieve top-line growth, it’s no surprise that publicly-traded industry firms are looking to exchange cash on the books for investment in M&A opportunities. It appears, however, that so far in 2011 the domestic marketplace is not as reliant upon the public firms for deals as compared to years and quarters past, perhaps indicative of private firms adopting similar M&A growth strategies as their publicly-traded counterparts.

% of Global Transactions Involving a Public

% of Domestic Transactions Involving a Public

A Break in Overseas Advancement into the U.S.: In the first quarter of 2011, just under 9% of all domestic sales involved a non-U.S. buyer, down from just under 20% in 2010. Reversing a trend seen since 2007, there were more transactions involving a U.S. firm buying an international firm (5) than there were a non-U.S. firm buying into the U.S (4).

For the 4 transactions involving a U.S. seller and international buyer, 2 of the buyers were headquartered in the UK and the remaining two were headquartered in Canada and Ireland. For the 5 transactions involving a U.S. buyer and an international seller, 2 of the sellers were headquartered in Canada, and the remaining three were headquartered in India, the Netherlands, and the UK.

% of Domestic Deals Involving a Non-US Buyer

Attractiveness of U.S. Market

Demand for Texas, North Carolina, Canada, and the UK strongest so far in 2011: Through the first quarter of 2011, 45 total domestic firm sales have been tracked. Both Texas and North Carolina had 5 firm sales announced, followed by Florida (4), California (3), Colorado (3), Ohio (3), and Virginia (3). While it’s not surprising that Texas is atop the list of firm sales announced, it is somewhat surprising that North Carolina had 5 deals through the first quarter, as it had 3 sales in all of 2010. Also, through the first quarter of 2011, 45 total international firm sales have been tracked. Both Canada and the United Kingdom had 8 deals announced, followed by Australia (4), South Africa (4), India (3), and the Netherlands (3).

Top States for Firm Sales

Top International Countries for Firm Sales

For a full listing of industry M&A activity, click here >