State of M&A in Kansas City 2019

Th e e nd o f a memorable decade MUCH LIKE THE KANSAS CITY CHIEFS, M&A activity ended this memorable decade on a high note as we witnessed record levels of transactions nationally and in our region. On a global scale, cross-border activity was down amidst several geopolitical factors, notably involving relations with China as well as concerns over Brexit and increased tensions in the Middle East. Domestically, strong M&A performance was evident as the stock markets reached new highs, private equity firms continued to raise unprecedented funds, unemployment reached record lows, the Federal Reserve eased rates, and companies capitalized on the desire to grow through strategic consolidation. We anticipate these favorable economic conditions will continue to provide momentum for the start of the new decade.

The 2019 CC Capital Advisors State of M&A Report tracked 207 transactions involving Kansas City-area companies. This is the highest number of transactions reported since we began publishing this report in 2004, and an increase of 6.2% year-over-year. The area once again saw the Technology sector lead the way, with strong activity in Manufacturing and Professional Services as well. Private Equity was active in our region with a reported 71 total tractions, or 34% of the total. and increasing Private Equity activity. Even though global M&A transaction volume was down in comparison to 2018, global M&A transaction value was in line with last year, primarily driven by the increase in megadeals in the US. North America transaction values were up 10% versus 2018, while activity in Europe, the Middle East and Africa was down 13% and Asia down 6%. M&A volume continues to progress behind the tailwinds of record liquidity

Deal volume in the US was particularly active, with notable deals including United Technologies Corporation acquiring Raytheon Company in a merger of equals transaction for $89 billion, Bristol-Myers Squibb acquiring Celgene Corp. for $74 billion, and AbbVie Inc. purchasing Allergan PLC for $63 billion. A few noteworthy 2019 transactions in our region include the sale of Bayer’s Animal Health Unit located in Shawnee, KS to Elanco Animal Health for $7.6 billion, the combined sale of Tallgrass Energy LP and GP to The Blackstone Group for a total equity value of $6.8 billion, the sale of the prepaid wireless business of Sprint to DISH Network Corporation for $1.4 billion, and the additional sale of Jefferies Financial Group’s 31% equity stake in National Beef Packing Company to Marfrig Global Foods S.A. for $970 million (raising Marfrig’s stake in National Beef to 82%).

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