Middle Market Deals Drive Increase in M&A Activity in Second Quarter

Merger and acquisition (M&A) transactions in the engineering and construction sector increased more than 50% in the second quarter of 2013, as companies in the sector looked to expand their geographic footprints and product sets with bolt-on acquisitions, according to analysis from PwC US; however, total deal value continued its downward trend.

According to PwC US, there were 41 engineering and construction transactions in the second quarter worth $50 million or more — a 52% increase compared to 27 deals in the first quarter of 2013. Total value of deals worth $50 million or more declined to $7.8 billion in the second quarter from $12.1 billion in the first quarter of 2013, as the sector focused on smaller, middle market deals. With the lack of mega deals (transactions worth more than $1 billion), average deal size also decreased to $189 million — the lowest point in more than three years.

Regionally, North America, driven by an increase in U.S. activity, led in both deal volume and value in the second quarter, with a total of 17 deals worth $50 million or more, representing a total value of almost $3.7 billion. The uptick in U.S. activity and cooling growth in a number of developing economies drove an increase in number of deals from advanced economies. For more information on PwC’s Deals practice, visit the firm's website.