Philadelphia M&A update: Q4 2019

M&A activity

There were 162 transactions that closed in the Philadelphia regional market during the fourth quarter of 2019 (Q4 2019), a decrease of approximately 6.9 percent from the 174 closed transactions in the prior quarter. The 162 closed transactions mark an increase from the 148 closed transactions during the same period in 2018. Additionally, aggregate reported transaction value decreased approximately 76.3 percent from Q4 2018.

In 2019, North America’s overall M&A value exceeded $2.0 trillion for the fifth consecutive year. M&A volume decreased 12.3 percent and aggregate transaction value decreased 14.4 percent compared to 2018. These declines are caveated by the fact that 2018 was a record year for M&A. Similar to recent years, much of 2019’s activity can be attributed to a few large deals, including two valued at more than $70 billion. In fact, M&A above $5 billion comprised 32.6% of all deal value in 2019, compared to 33.2% in 2018.

With the increased prominence of startups and companies staying private for longer periods, high-growth companies have contributed to lofty valuations. The median EV / EBITDA multiple for M&A transactions rose to 10.1x in 2019, up from 9.4x in 2018.

Quarterly Philadelphia region M&A activity

Source: S&P Capital IQ, PitchBook, and Baker Tilly Capital research (January 2020)

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