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M&A surpasses $1 trillion for 3rd straight period; VC speeds up deployment

S&P Global Market Intelligence offers our top picks of global private equity news stories and more published throughout the week.

It will come as no surprise to those operating in the industry that private capital with coffers full of dry powder is among the drivers of a sustained M&A push globally.

The second quarter represented the third straight period in which total announced M&A value surpassed $1 trillion. This is the first time the announced deal value exceeded that threshold in three consecutive periods, according to S&P Global Market Intelligence data that dates back to the 1990s.

Investment bankers remain bullish on the prospects of continued M&A despite regulatory hurdles.

With corporates looking for strategic deals, special purpose acquisition companies on the prowl for targets, and private capital ready to invest at a reasonable clip, regulators have been on the lookout.

SPAC IPOs remain above levels before the 2020 boom, but the value of U.S. deals dipped to $11.70 billion in the second quarter from $91.37 billion in the previous quarter, while the number of deals decreased to 52 from 275. This followed SEC guidance that prompted the vehicles to determine whether warrants they offered to investors were accounted for appropriately on their balance sheets as debt or equity, as well as questions around lofty target company performance projections.

More traditional M&A activity has also been under the regulatory spotlight in both the U.S. and the U.K. Further robust scrutiny will likely come from President Joe Biden's executive order that called on agencies to update merger guidelines in an effort to promote competition. Observers view technology and healthcare as the sectors that are the most likely targets of the order.

These things take time, however, and the order has not put a stop to all large deals. In the near term, the executive order could even speed up announcements of M&A as companies look to get ahead of more stringent rules.

Read more about the outlook for global M&A and access the full report here.

CHART OF THE WEEK: VC pounds pavement for new investments

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➤ Startups globally brought in roughly $63.12 billion across 1,598 funding rounds in July, more than doubling the approximately $27.53 billion they amassed during the same month last year, according to S&P Global Market Intelligence data.

➤ Venture capital deployed approximately $306.98 billion in the first half, up 150.5% from about $122.55 billion in the same period in 2020.

Walmart Inc.-owned Flipkart Pvt. Ltd. secured the biggest funding round in July, according to S&P Global Market Intelligence data. It pulled in $3.6 billion in a mature funding round co-led by SoftBank Investment Advisers (UK) Ltd.'s SoftBank Vision Fund 2, giving it a post-money valuation of $37.60 billion.

FUNDRAISING AND DEALS

* The Carlyle Group Inc.'s bid to buy Vectura Group PLC for £1.1 billion via its Carlyle Europe Partners V fund was rejected by the U.K. pharmaceuticals business in favor of a superior 165 pence-per-share proposal from Philip Morris International Inc. The private equity giant, along with PAI Partners, CVC Capital Partners Ltd. and Bain Capital LP, is also considering submitting a first-round bid for Equans, the technical services division of French utility company Engie SA, according to Leveraged Commentary and Data, citing market sources.

* Private equity funds managed by Blackstone Inc.'s Blackstone Energy Partners business will purchase up to $500 million of perpetual preferred stock of solar technology company Array Technologies Inc.

* EQT AB (publ) updated its buyout offer for Iress Ltd. to A$15.91 per share, valuing the Australian software provider at A$3.2 billion.

* Advent International Corp. will purchase a majority stake in Chinese pharmaceutical capsule maker Shanxi Guangsheng Medicinal Capsule Co. Ltd. from MeiHua Holdings Group Co.Ltd. and co-investors.

ELSEWHERE IN THE INDUSTRY

* Venturehouse Group LLC-backed security services provider Kastle Systems International LLC is looking to go public through a merger with Simon Property Group Inc.'s blank-check company Simon Property Group Acquisition Holdings Inc., Bloomberg News reported, citing a person with knowledge of the matter.

* The Jordan Co. LP and Stonepeak Partners LP will sell a controlling stake in U.S. wireless communications infrastructure operator Vertical Bridge Holdings LLC to funds affiliated with DigitalBridge Investment Management.

* Funds managed by Searchlight Capital Partners LP are in exclusive talks to buy a majority stake in parking management technology company Flowbird SAS from Astorg Partners and Mellby Gård.

* Funds advised by Affinity Equity Partners agreed to sell healthcare technology company MedicalDirector to Telstra Corp. Ltd. unit Telstra Health.

FOCUS ON: APPLICATION SOFTWARE

* Insight Partners led a $100 million series C financing round for cloud-based frontline operations platform Tulip Interfaces Inc.

* Catamorphic Co., doing business as LaunchDarkly, received $200 million in a series D funding round led by Lead Edge Capital Management LLC at a post-money valuation of $3 billion.

* IK Investment Partners will sell corporate IT solutions and cloud service provider Visolit AS in a deal with Advania hf. The firm's IK Investment Partners Fund IX will join Visolit as a new minority shareholder.