A going-private transaction ranks as April's biggest global M&A deal

Two more US M&A announcements topped $10 billion in April, with the largest deal being a going-private transaction.

Silver Lake Technology Management LLC is acquiring Endeavor Group Holdings Inc. in a transaction valued at $21.09 billion, and Johnson & Johnson announced a $12.95 billion deal for Shockwave Medical Inc. The transactions increased 2024's total number of global $10 billion-plus M&A announcements to 12, four more than the total through the first four months of 2023.

Made in the USA

While the number of large deals has been picking up, there has been less geographic diversification this year. Through the first four months of 2023, two $10 billion-plus deals came from the Asia-Pacific region and one came from Europe. Through April, the targets in all of the announced 2024 $10 billion-plus transactions have been based in the US. The first non-US deal above $10 billion could come in May, as Banco Bilbao Vizcaya Argentaria SA made a proposal to purchase Banco de Sabadell SA in a bid that would top $11 billion.

Lazard Inc. CEO Peter Orszag said the M&A in North America will experience a larger uptick than in Europe in 2024. "But still a healthy level of activity and expanded level of activity in Europe," Orszag said during his company's earnings conference call in April.

As for the M&A participants, private equity firms have been less active than companies making strategic acquisitions. Private equity firms have been largely on the sidelines, thanks in part to higher interest rates that increase acquisition financing and depress valuations. Orszag noted, however, that dialogue and activity among private equity firms is starting to accelerate.

"We're now in the stage of the cycle where sponsors are coming back on the playing field," Orszag said.

The Silver Lake transaction provides some support to the notion that private equity firms are becoming more active. Endeavor announced in October 2023 that it was reviewing strategic alternatives, and that led to Silver Lake, which had been an investor in Endeavor, making its bid.

Evercore Inc. Chairman and CEO John Weinberg anticipates a pickup in activity from private equity. "We've seen sizable transactions in April, and we believe sponsor activity should continue to gain momentum," Weinberg said.

Health checkup

Large healthcare transactions have been showing signs of picking up.

The deal for Shockwave Medical marks the third healthcare M&A deal to top $10 billion since December 2023. Prior to that, there had been no healthcare deals above $10 billion for a roughly eight-month period.

Healthcare can be an active sector for large-scale deals. In 2021, for instance, it was the sector with the most $10 billion-plus deal announcements with nine.

The Shockwave Medical transaction is Johnson & Johnson's second $10 billion-plus deal in less than 18 months. In November 2022, the company announced an $18.0 billion deal for Abiomed Inc.

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Johnson & Johnson has also pursued smaller deals, such as a $400 million transaction for Laminar Inc. that closed in late 2023. During a call discussing the Shockwave deal, CEO and Chairman Joaquin Duato said Johnson & Johnson has the financial flexibility to execute larger transactions for seasoned companies as well as smaller deals for developing companies.

"We consider both type of transactions, established technologies and also some bets on earlier technologies that may have a significant opportunity for us to create value," Duato said.