Market Update — Fourth Quarter 2007

2007 turned out to be a very interesting year in the world of mergers and acquisitions. January began with 51 closed deals of over $1 billion each, for a total transaction value of over $185 billion, with the median trading value of15.4x EBITDA. In this “mega-deal” market, the months following saw increased activity and deal value—until the third quarter. August and September saw a steep falloff in activity, due in part to the normal vacation-driven slowdown in the financial markets, but in larger part to the credit crisis that began sweeping the nation. This point is driven home by the drastic reduction in the number of mega-deals announced beginning in August, as deal makers lost confidence that transactions could get funded and delayed closings until the debt markets became more friendly.

While the number of announced new transactions fell in the last part of 2007, deals that were already underway found ways to get funded and closed by the end of the year. You will see that when the credit crunch hit in July, the number of deals closed fell drastically in the following two months, and then worked their way through the funding system over the last three months of the year to end with a strong 2007 overall.

Download the complete Market Update — Fourth Quarter 2007.