Quarter by quarter offshore deal volumes rose steadily throughout 2013, resulting in a cumulative 12-month deal value topped only three times in the last decade, according to a report released today by Appleby, one of the world’s largest providers of offshore legal, fiduciary and administration services. Jersey contributed to the increase in volume, experiencing a 12% uptick in the number of deals involving local targets.
The latest edition of Offshore-i, which provides data and insight on merger and acquisition activity in major offshore financial centres, focuses on deals during the fourth quarter of 2013, as well as the year overall. The firm observed considerable gains in Q4 over the previous quarter in terms of the number of deals, their cumulative value, and average deal size across jurisdictions.
Jersey M&A Environment
There was a 12% uptick in deals involving Jersey targets with 47 in Q4 2013, as against 40 in Q3. When compared to the same quarter a year ago, Jersey deal volume was up 52%, with a 6% increase in total value. The total value of deals involving Jersey targets was USD934m in the final quarter of 2013.
“Offshore companies have been busy and involved in transactions across a wide range of sectors and geographies,” said Wendy Benjamin, Practice Group Head for the Corporate & Commercial department in Jersey. “Jersey saw a considerable increase in the number of deals and total value over the same quarter last year, and we’re optimistic this momentum will carry through 2014.”
The fourth quarter also saw 28 deals involving a Jersey purchaser representing a total value of USD6.35bn. This included the largest deal of the quarter involving an offshore purchaser—the acquisition by Jersey-based pharmaceuticals group Shire of American target ViroPharma for USD4.2bn. In addition, Experian, the Jersey-based global information services company, completed its USD850m acquisition of American target Passport Health Communications, Inc., which provides data, analytics and software to the US healthcare payments market.
Global Offshore Markets Heat Up
For the year, offshore companies have been busy and were involved in transactions across a wide range of sectors and geographies. The return to form of the equity capital markets, and particularly the heating up of the IPO pipeline, has been a notable feature for 2013, as has the steadily growing frequency of deals in the USD1bn-plus range. The year ended with a cumulative 12-month deal value of USD151bn, an annual total topped only three times in the last decade.
“While the final quarter of the year is typically the busiest, every one of the principal indicators has progressively improved,” said Cameron Adderley, Partner and Global Head of Corporate & Commercial. “Indeed, the global M&A environment is fragile and to an extent lacks depth, but we can’t help but view these year-end numbers as positive.”
In Q4 2013 the offshore markets ranked sixth amongst world regions for deal volume, fifth for deal value and third for average deal size. Only North America and South and Central America came in with a higher deal average.
Key themes of Q4 2013 across jurisdictions:
- There were more deals in the fourth quarter of 2013 than in any other quarter last year, with 607. Throughout the year deal volumes rose steadily quarter-on-quarter.
- The value of deals was USD47.9bn in Q4, up 32% on the previous quarter. The average deal size was USD79m and has only been higher in three quarters in the last four years.
- There were 11 USD1bn-plus deals in Q4 2013, almost double the number in the previous quarter, including two worth over USD2bn. Energy and natural resources deals feature heavily.
- Financial services and insurance continues to be the most active sector, while mining, quarrying and various manufacturing sectors were also busy.
- The largest type of deal by volume was a minority stake, but acquisitions continue to grow in number and were the biggest deal type by value, making up almost half of the deal value in Q4 2013.
- IPO activity remains encouragingly strong, with 62 IPOs pending or completed in Q4 2013 as against 28 in the same quarter of 2012.
- Bermuda as an offshore target had a breakout quarter and more than doubled the value of deals done on its shores, almost equaling the USD15.6bn deal value for Cayman.
- The frequency of buying activity made by offshore companies continues to grow and the combined value of such deals was USD37.8bn in Q4 2013, one of the largest amounts in the past few years.
Category: Finance & Business