Private Equity Buyer/Public Target M&A Deal Study

Fri, 25 May 2012 14:26:28 +0000

Posted by Noam Noked, co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Friday, May 25, 2012

Editor's Note:

The following post comes to us from John Pollack and David Rosewater, partners focusing mergers & acquisitions at Schulte Roth & Zabel LLP. This post discusses the Schulte Roth & Zabel Private Equity Buyer/Public Target M&A Deal Study 2011 Year-End Review, which is available here. Posts about previous versions of the study are available here and here.

Survey Methodology

We conducted our survey as follows:

We reviewed the treatment of certain key deal terms in all private equity buyer/public company target cash merger transactions involving consideration of at least $500 million in enterprise value [1] entered into during 2010 and 2011, which totaled 37 transactions.
We then compared the treatment of such deal terms in the 20 transactions entered into between Jan. 1, 2010 and Dec. 31, 2010, which we refer to as the “2010 Transactions,” with the treatment of the same key deal terms in the 17 transactions entered into between Jan. 1, 2011 and Dec. 31, 2011, which we refer to as the “2011 Transactions.”

Key Observations

As widely reported, 2011 was a tumultuous year characterized by economic uncertainty. The European sovereign debt crisis and the downgrade to the U.S. credit rating caused significant volatility in the U.S. debt and equity markets. The large private equity buyer/public company segment of the U.S. M&A market was not immune to these factors. Deal activity was down overall relative to 2010 and the deals that were completed in 2011 took longer to complete.

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The Harvard Law School Forum on Corporate Governance

Private Equity Buyer/Public Target M&A Deal Study