US design firm deals up 13% in the first half of 2019 compared to the first half of 2018; 22% of all global deals involve private equity firms
Morrissey Goodale reported 167 U.S. deals in the first six months of 2019, easily surpassing the 146 transactions tracked over the first six months of 2018. This puts 2019 on track to see the highest deal count recorded in a calendar year.
Perhaps even more notable, from January through June of 2019 22.4% of all global transactions, and 19.8% of all U.S. transactions, involved private equity firms or A/E firms backed by private equity dollars. Private equity’s escalating presence in the A/E space has been well-documented recently, as more and more industry players seek access to capital to tackle strategic plans and facilitate growth. As recently as 2016, a mere 12% of all deals involved private equity firms. Now, with 49 deals tallied through the first six months of 2019, the A/E industry is on pace to potentially see its first year with 100 or more private equity-backed transactions.
The mid-year 2019 M&A stats also reveal the following:
- There were 52 international deals in the first half of 2019. This is down from the 67 international deals during the prior mid-year period. However, the global deal count of 219 during the first six months of 2019 outpaces the 189 deals reported in the first half of 2018 due to the continued surge in U.S. deal making.
- In the first half of 2019, inter-state deal activity (defined as a firm headquartered in one state acquiring a firm headquartered in another) accounted for 65.9% of all US deals, the highest figure recorded over the last decade. This indicates firms are using M&A as a means of growing and expanding beyond core geographies.
- In the first half of 2019, 44.9% of all U.S. deals involved firms ranked in the ENR Top 500.
- California retained its title as the single hottest state for M&A activity, with 22 deals in the first half of 2019 as compared to Texas, the next hottest state, which saw 14 deals. This year’s pace has matched 2018’s record year for the Golden State, which saw 45 deals completed over the twelve-month period. Florida, Virginia, and Illinois are also on pace for a record number of deals in 2019.
- The median acquiring firm in the first half of 2019 generated $69.4 million in revenue – down significantly over previous years. This indicates M&A activity has become a means for relatively smaller firms to grow and expand in 2019.