FactSet Insight recently released its March report, showing a decrease in U.S. M&A activity for the month of February. (Source: FactSet Insight) First-quarter U.S. M&A activity experienced a slow start overall. Although private equity activity was up 10.1% from January into February, actual deal announcements decreased from 995 to 938 in February. (Source: ValueWalk)
A slow start in PE and M&A activity may be enough to wonder about the state of venture investment for 2015, but signs are starting to point towards change. February’s MACI (Mergers & Acquisitions Conditions Index) composite score increased slightly from 52 to 52.9. An even more significant sign is the jump of M&A Lead scoring from January’s low rating of 48 to a far more positive 69.7 reading for February. (Source: Benzinga)
Merger between Kraft and Heinz a sign of positive 2015 deal activity
The recent mega-merger between food production titans Kraft and Heinz gives every indication of increased deal activity for 2015. Led by principals Warren Buffett and Jorge Paulo Lemann, the announced merger carries market valuation of Kraft Foods, Inc. at an impressive $46 billion. (Source: Bloomberg Business) This constitutes the largest M&A deal to date this year and results in the new Kraft Heinz Co. soaring to the top of food stocks.
The Kraft-Heinz merger gives bankers hope that 2015 activity will even exceed last year’s seven-year climax of $3.4 trillion. Roy Behren, co-manager of Merger Fund (New York, New York) shared his prospectus on future M&A activity for coming quarters, “There are still opportunities available, even with the stock market hitting all-time highs… We expect deal activity to continue at a very high pace.”
Time will only tell if second-quarter and future M&A deal announcements will affect the new trajectory set by Kraft Heinz Co. as 2015 activity continues its new upward trend.