The number of offshore merger & acquisition deals (M&A) in the Isle of Man increased by 17% in the second quarter 2015 when compared with the first three months of the year.
The results reflect increases recorded across the offshore jurisdictions, where deals were up by 25% according to a report released by Appleby, one of the world’s largest providers of offshore legal and administrative services. The report also confirmed the average deal size remained robust.
The latest edition of Offshore-i, an Appleby report that provides data and insight on corporate transaction activity in the major offshore financial centres, focuses on deals announced during the second quarter of 2015. The quarter recorded 732 deals worth a cumulative USD94.4bn.
In the Isle of Man the number of deals increased by 17% compared with Q1 and by 23% when compared with Q2 in 2014. The total value of deals stood at USD750m.
Simon Harding, partner in the Appleby Isle of Man Corporate department, said: “When combined, the first two quarters of 2015 saw a total of USD225bn spent on offshore deals, way out in front of the previous record for a first-half period. Additionally, more than 700 deals have been announced in six of the last seven quarters and the drop-off that we witnessed in the number of offshore transactions in Q1 now looks to have been a blip as the market paused for breath after a strong and busy 2014.
“The report shows the strong increase in deal volume has been mirrored in the Isle of Man. It says the long-term trend is for continued growth, and indicates this trend will be reflected here.”
The Transactions Environment
Average deal size in the second quarter of 2015 was recorded at USD129m, a value topped only twice in the past decade, and bringing average deal value for the first half of the year to USD176m. The cumulative first half deal value of USD225bn in 2015 far outstrips the previous recorded high for a first half, which was the USD159bn spent in 2014.
The report found much deeper activity levels across the value ranges in the second quarter; 21 deals worth over a billion dollars each were recorded in the quarter, six more than the previous record of 15 billion-dollar deals in a three-month period.
Cameron Adderley, Partner and Global Head of Corporate at Appleby, said “Globally, deal values are increasing at a much faster rate than volumes, as shrewd acquirers learn the lessons of the past and become more selective of their targets, and at the same time more willing to invest large sums in the right deals.
“Buyers are willing to pay a premium for acquisitions that help them to achieve long term strategic ambitions.”
Key themes of Q2 2015:
• There were 732 deals in the quarter, up 25% on the 586 recorded in the first quarter of the year. Six of the last seven quarters have now recorded more than 700 deals each
• The value of deals was USD94.4bn, down on the massive total of USD130.6bn seen in the previous quarter but the third highest quarter recorded in the last decade. The first half total of USD225bn far outstrips the previous record for a first half, which was USD159bn
• There were no fewer than 21 deals worth over a billion dollars each in Q2 2015, six more than the previous record of 15 billion-dollar deals in a three-month period. This is the sixth quarter in the last seven to record more than 10 billion-dollar deals, after only four such quarters in the preceding decade
• The financial and insurance activities sector was once again on top, thanks to insurance and reinsurance deals continuing to feature heavily offshore. Deal value remains widely dispersed with 20 subsectors showing cumulative deal activity worth more than USD1bn each, up on the 15 subsectors at that level in Q1
• Capital increases are the most popular deal type once again, followed by minority stakes and acquisitions
• As usual, the Cayman Islands dominated deal volumes as the top target, accounting for more than a third of all deals done offshore. Bermuda, the BVI and Hong Kong were largely level-pegging behind, and the same was true in value terms. The value of deals done in Cayman in Q2 stood at USD38bn, double that recorded in Q1
• Q2 2015 was another busy quarter for outbound deals involving offshore acquirers, with 652 outbound deals worth USD79bn, as the offshore world continues to spend big. The average deal by an offshore acquirer was worth USD122m in Q2, the third highest average deal size recorded in any quarter since 2004
• Measured by average deal size, the offshore region is still second worldwide, behind only North America. More money was spent on offshore targets than was spent on deals in Eastern Europe, Africa, the Middle East and South and Central America combined
• The offshore region remains ranked sixth in the world by deal volume for Q2 2015, and stays in fourth for value activity.
Photo - Simon Harding.
