Value of M&A Deals

 "No companies or SPACs went public on U.S. exchanges last week, which Renaissance Capital reports is the first such week in more than two years. There's also nothing on the calendar for this week." - Axios, May 31, 2022.

That slowdown in the IPO niche can blast a chill through some law firms' transactional practices. 

But a warming effect can come from data about the value of the deals which are taking place in M&A. You bet, bypass the dismal numbers about the number of deals per se. Even megadeals are happening. 

In its official report on M&A activity, law firm Paul Weiss presents recent highlights M&A activity. As a Wall Street law firm, Paul Weiss knows how the direction of dealmaking directly can directly impact most professional services firms, including law. Here are the developments of most interest:

Positive Trends

  • Yes, since March, the deal count continued to decline. That had been by 14%. However, in April for the first time in 2022, there had been increases in total deal value. Actually, aggregate deal value increased by 33% in the US and 39% globally in April versus March.
  • In the US, both strategic and sponsor deals followed the broader decline trend - 18% and 4%, respectively - according to count. However, they increased in total deal value - 45% and 20%, respectively.
  • As for the global picture, sponsor deals more than doubled in aggregate value, increasing by 105%. But strategic deals only had an uptick of 1%.

More of the Same

Simultaneously, US crossborder activity did decline in April. Both inbound and outbound deal count decreased by 17% and 5%, respectively. In terms of value there was a decrease for both – 14% and 30%, respectively.

Reflection: Like corporations themselves, law firms have to diversify their practices. Amid the current volatility there is too much risk in being a one-trick pony. Many will recall how in the past five years some law firms had bet the ranch on growing M&A practices. 

Connect with Editor-in-Chief Jane Genova at jangegenova374@gmail.com. Now and then she does freelance communications assignments for law

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