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Bankers Avoid The August Vacation, Generate Highest August M&A Announced Deal Volume Since 2000

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August is a typically slow month on Wall Street, as traders and investors take time away from their desk to enjoy the final days of summer.

It would be difficult to make the case that bankers took the month of August off, given that merger and acquistion activity over the month came out at $155 billion in announced U.S. deals. That's an increase of roughly 134 percent over the $66 billion in announced U.S. deals in August of 2013.

Capital IQ highlights in a report on Thursday that the last time August had more than $100 billion in announced deals was back in the year 2000, when $130.9 billion in deals was announced. The $82 billion Kinder Morgan (NYSE: KMI) early August deal helped boost August M&A levels, making up for roughly 53 percent of the month-to-date's deal value.

Other key points from the Capital IQ report:

  • A typical U.S. corporate strategic acquisition in the consumer discretionary sector this year is valued at 1.8 times the revenue and 28.0 times the EBITDA. Among deals of $1 billion or more, disclosed multiples are 3.1 times the revenue and 14.9 times the EBITDA.
  • Among overall U.S. M&A, consumer discretionary remains the top sector for U.S. deal value to date this year with $239 billion in transactions, followed by health care with $190.8 billion.
  • The materials sector is the slowest field for U.S. M&A activity, with less than $40 billion in announced deals to date in 2014
  • Year-to-date announced U.S. consumer discretionary M&A transactions finds 24 transactions valued at $1 billion or greater; 13 deals valued between $500 million to $999.9 million; and 66 deals valued between $100 million to $499.9 million.
  • Among foreign acquisitions in the U.S. of more than $1 billion, a typical transaction multiple is 6.6 times revenue and 13.9 times EBITDA.
  • By deal count, financials is the most active for foreign acquisitions in the U.S., with 690 transactions.

Latest Ratings for KMI

Mar 2018UBSMaintainsBuyBuy
Feb 2018JP MorganMaintainsOverweightOverweight
Feb 2018Morgan StanleyMaintainsOverweightOverweight

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