KUHN CAPITAL Sunday, February 25, 2018
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M&A Stats: Rosy as She Goes


Third quarter stats on US M&A activity shine on, with computer software and services out front.

According to Factset, 403 public companies had put themselves on the dock by the third quarter of 2005 versus 381 public deals done by the same quarter of 2004. For private companies, 4,204 deals have closed through the third quarter compared to 3,929 this time last year, a 7% increase.

Whatís surprising is that, given the robust performance of the US deal market this year, Western Europe is many times stronger: over $200 billion in value versus $26.4 billion here. We believe thatís because many European industries are more highly fragmented than in the US and Eurofication facilitates consolidation.

Meanwhile, back in the USA, sales of computer software and services companies lead with 406 deals valued at $20.6 billion announced YTD versus 365 deals valued at only $5.7 billion last year this time. Now thatís consolidation.

Itís also a recognition that the software/tech services industries are increasingly viewed as mature and available to economies of scale. Larry Ellison began making this point to mostly skeptical audiences (and an antagonistic DoJ) several years back. Call him an oracle.

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