Third-quarter merger and acquisition activity grows
MERGER and acquisition activity in SA gained momentum in the third quarter of this year, according to the latest data, released yesterday by Zephyr.
By the end of the quarter, deal numbers were up to their highest level since the fourth quarter of last year, according to the business data tracking agency.
Value increased 6% quarterover-quarter, from $2.3bn to $2.4bn, but it was down 48% on the same time last year. The number of deals climbed from 84 in the second quarter to 104 in the third quarter — a 24% rise.
Zephyr is a database managed by Zephus that contains information on mergers and acquisitions, initial public offerings and venture capital deals. Its research is collated and published by Belgian firm Bureau van Dijk.
The top deal of the quarter was mining giant Anglo American’s purchase of a 5% stake in Kumba Iron Ore worth $950m, accounting for more than a third of the value of all the transactions in the third quarter with South African targets. The secondhighest was a $489m convertible bond issue by furniture maker Steinhoff International.
Other South African targets in the top 20 deals included Northam Platinum, construction and engineering group Aveng and ceramic tiles maker Italtile.
Zephus said that while general merger and acquisition activity in the country was strong during the third quarter, private equity investment in SA during the three-month period was disappointing, with just one transaction recorded for which a value was not disclosed, compared with the $446m invested across three deals in the previous quarter.
“The deal in question was a secondary buyout of global industrial services group Waco International by a consortium led by Ethos Private Equity and including RMB Ventures and Standard Bank. The group acquired the company from Unitas Capital and CCMP Capital Advisors for an undisclosed sum,” Zephus said.
Law firm Edward Nathan Sonnenbergs chairman Michael Katz said in August he expected to see strong merger and acquisition activity in the fourth quarter. “(The firm) has a good pipeline and I am expecting businesses on the whole to see healthy merger and acquisition activity during the rest of the year.”