Strongest Month for PE-Backed M&A since October '11

The volume of private equity-backed M&A totaled $35.0 billion for the month of August, the strongest month for worldwide PE-backed M&A since October 2011. The Carlyle Group, which ranks as the most active worldwide private equity acquiror for year-to-date 2012, announced a $4.9 billion bid for Dupont's coating unit and a $3.3 billion bid for Getty Images during the month. Private equity deal making accounted for 20% of August M&A volume, the highest level this year. In the United States, private equity acquirors accounted for 25% of the $76.6 billion in announced deals this month.

High tech and energy & power lead the sectors for PE-backed M&A this year, each accounting for 13.1% of activity. Industrials and media deals account for 12% each.

Monthly European M&A Falls to 3-Year Low

European M&A activity during August fell to $21.8 billion, a 59% decline from the previous month and the slowest month for deal making in Europe since April 2009. Year-to-date, M&A activity in Europe totals $453.7 billion, down 13% from the year ago period. The year's largest deal, Glencore's $48.9 billion bid for Xstrata, accounts for 10% of M&A activity in Europe this year and faces a critical shareholder vote in early September. Eleven banks stand to share approximately $114 million in fees if the deal completes.

Deal making in the financials, materials, energy & power and industrials sectors represents 58% of European M&A activity this year, up from 54% during year-to-date 2011. Goldman Sachs is the top financial advisor in Europe this year, while Morgan Stanley has climbed four spots to second.

Record-breaking August for High Yield Debt

Multi-billion dollar high yield bond offerings from Community Health Systems, Sprint Nextel and First Data Corp pushed the volume of global high yield corporate debt during August to $31.3 billion, marking the strongest August for high yield debt issuance since records began in 1980. Companies in the United States accounted for 96% of monthly issuance, which saw average coupons fall to 7.02%, down nearly 100 basis points from July.

Financials, energy & power, media and high tech issuers accounted for 60% of monthly activity, while JP Morgan lead all bookrunners with 14.9% of monthly high yield debt activity. Bank of America Merrill Lynch followed in second place with 12.3% from $3.8 billion in deals.

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Thomson Reuters
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