In the first three quarters of 2018, 3,501 deals worth $508.8 billion closed, representing an increase of 2.1% and 3.4%, respectively, over the same period in 2017.
A number of mega-deals were completed this quarter that helped drive deal value – the largest being the acquisition of Dr Pepper Snapple Group by JAB Holdings and BDT Capital Partners for $21 billion.
Private equity (PE) firms continue to face increased competition for high quality assets, particularly from cash rich corporates which have benefited from the recent tax reforms. This has driven up multiples and forced private equity firms to be more aggressive on deal process or more elaborate in their investment theses to successfully deploy capital without sacrificing returns.
We therefore see carve-outs / divestitures driving the majority of deal activity as: i) private equity firms look to deploy high levels of dry powder in this competitive environment; and ii) corporations look to divest non-core assets, or are forced to sell non performing business units by activist investors.
“Private equity firms will need to focus on positioning themselves in a deal early-on with a specific angle, be able to execute quickly, and show increased discipline to successfully deploy capital without sacrificing returns.”
Private Equity Leader, PwC US
Tel: +1 (703) 918 1474
US Private Equity Assurance Leader, PwC US
Tel: +1 (646) 471 8310
Private Equity Tax Leader, PwC US
Tel: +1 (646) 471 1691
Private Equity Advisory Leader, PwC US
Tel: +1 (214) 754 4560