This week PricewaterhouseCoopers (PwC) announced that, while still impressive with a solid outlook, a softening of deal activity occurred across a number of sectors, due to economic and political instability from the current US election season, Brexit, and the economic slowing in China. When looking at deals in terms of value, PwC said that third quarter total value was $26 billion, which was off 5 percent annually and 30 percent compared to the second quarter, even though over all activity remains strong and five megadeals (those with a value of more than $1 billion) totaled $14 billion.
PwC reports in its “Global Transportation and Logistics M&A Deals Insights Q3 2016” that activity for these sectors is stable for 2016. The first two quarters saw more than 50 deals each with Q3 coming in at 50 exactly, an eleven per cent decrease against Q2 and Q3 2015 alike. PwC expects the transportation and logistics sector to remain in step with the current pace.
Strategic investors, which have categorically been a large percent of M&A activity for T&L, saw more financial investors become involved this year, with PwC detailing that the total deal volume and value of financial investors saw gains of 8 percent and 33 percent, respectively, whereas deal volume for strategic investors in the third quarter, at ten, dropped to its lowest level over the last 12 quarters.
PwC US Transportation & Logistics Deals Leader, Darach Chapman said that the majority of the decrease in deal volume was attributable to reduced activity by strategic investors, who are more likely to be cautioned by political and economic reservations. outlook