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Merger and Acquisition

Pharmaceutical Industry M&A Activity Grew by 17% in H1 2020 amid 56% Drop in Deal Value

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Pharmaceutical Industry M&A Activity Rose by 17% in the First Half of 2020

According to the research data analyzed and published by ComprarAcciones, merger and acquisition (M&A) deal activity in the pharmaceutical sector rose by 17% in H1 2020, disregarding the economic toll of the global pandemic.

It saw a total of 41 deals during the period, but the Q2 2020 deal value total of $3.3 billion was the lowest quarterly total since Q1 2018.

According to PwC, the pharma subsector posted a drop of 56% in deal value from H2 2019 to H1 2020. For the PLS sector as a whole (pharma, biotech and medical devices), the decline in deal value was a massive 87.2% during the same period.

Pharma and Life Sciences (PLS) M&A Total Deal Value Sank from $272.9B to $35B YoY

The total deal value for the pharmaceutical subsector in H1 2019 was $100.1 billion. In contrast, its total deal value in H1 2020 was valued at $7.7 billion.

The PLS sector had a total of 99 deals valued at $35 billion in H1 2020. In H2 2019, the figures were higher, with 129 deals valued at $86.5 billion. H1 2019 was even bigger, with 119 deals valued at a remarkable $272.9 billion.

Meanwhile, for the healthcare industry as a whole, H2 2020 started off with 13 deals valued at $1 billion+ according to S&P Global.

On the other hand, based on a report from Global Data, the global M&A deal value started on a downtrend in Q1 2020. It went from $151.2 billion to $129.9 billion from February to March. Another study from S&P Global shows that the decline carried into Q2 2020, with a 35% drop in deal volume. Similarly, total transaction value dropped by 40%, the highest drop since 2015.

Comparing H1 2020 to H2 2019, the total deal volume sank by 32% year-over-year (YoY) from 10,155 deals to 6,938 according to Merger Market. Deal values sank by 53%, from $1.9 trillion to $901.6 billion during the same period.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Fintech

Payoneer Goes Public After SPAC Merger

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Payments provider Payoneer (PAYO.O) went public on the Nasdaq stock exchange on Monday after it closed a merger with a blank-check firm backed by fintech entrepreneur Betsy Cohen.

Payoneer shares, trading under the “PAYO” ticker symbol, pared its early gains by midday trading session. The listing came four months after the New York-headquartered company announced its plan to merge with special-purpose acquisition company FTAC Olympus Acquisition Corp in a deal valued at about $3.3 billion, Reuters reports.

It is expected to have up to $563 million in cash, including $300 million in the form of private investment in public equity, or PIPE, from investors that include Wellington Management, Dragoneer Investment Group and Fidelity Management & Research Company.

Payoneer, founded in 2005, has a significant number of employees, including its management team, in Israel. It provides e-commerce services to individual online sellers as well as platforms, including Airbnb and Amazon.com Inc. It has published a bullish forecast on revenue for 2021 due to accelerated digital commerce during the pandemic.

The company expects $432 million in revenue in 2021, compared with $94.7 million in 2020. It eyes process transaction volume of $64 billion, a jump from $44.4 billion in 2020, and has plans to invest in more features and pursue acquisitions.

“Now with the public currency, we are able to make bolder investments, make more acquisitions and move faster to do bigger things for more customers and more places around the world,” Scott Galit, Payoneer chief executive, said in an interview.

FTAC Olympus, one of a series of SPACs launched by Cohen, founder of The Bancorp, raised $750 million in its IPO last year. Cohen, a veteran dealmaker in the SPAC space, is also taking Israeli online stock brokerage eToro to the public in a deal that values the company at $10.4 billion.

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Sub Saharan Africa Mergers and Acquisition Transactions Totalled US$ 6.1 Billion in Q1 2021

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Refinitiv today released the investment banking analysis for the Sub-Saharan African for the first quarter of 2021. According to the report, an estimated US$99.3 million worth of investment banking fees were generated in Sub-Saharan Africa during the first quarter of 2021, down 39% from the same period in 2020 and the lowest first quarter total since 2014. 

While debt capital markets underwriting fees doubled to US$47.1 million, the highest first quarter total since our records began in 1980, fees from equity capital markets underwriting, M&A advisory and syndicated lending all declined from the first quarter of 2020.  Equity fees declined 42% to US$21.8 million, while syndicated lending fees declined 74% to US$15.0 million. 

Advisory fees earned in the region from completed M&A transactions reached US$15.5 million, down 65% from last year to the lowest first quarter total since 2005. Seventy-two percent of all Sub-Saharan African fees were generated in South Africa during the first quarter of 2021, and 39% were earned from deals in the financial sector. B Riley Financial Inc. earned the most investment banking fees in the region during the first quarter of 2021, a total of US$19.8 million or a 20% share of the total fee pool.

MERGERS & ACQUISITIONS

The value of announced M&A transactions with any Sub-Saharan African involvement reached US$6.1 billion during the first three months of 2021, almost level with the value recorded during the same period in 2020, and a five-year low.  The number of deals declined 14% over the same period to the lowest first quarter tally since 2014.

M&A involving a Sub-Saharan African target increased 73% year-on-year to US$4.3 billion during the first quarter of 2021.  Domestic deals increased 67% from last year to US$2.5 billion, while inbound deals, involving an acquiror outside of Sub-Saharan Africa, increased 83% to US$1.8 billion.  Meanwhile, Sub-Saharan African outbound M&A totalled US$721.4 million during the first quarter of 2021, down 66% year-on-year to the lowest first quarter level in six years.

The Zambian Government, through its mining investment arm ZCCM Investment Holdings, acquired the Mopani Copper Mines for US$1.5 billion in January.  The acquisition is the largest deal in the region to be announced so far during 2021.

With advisory work on deals worth a combined U$668.5 million, BofA Securities held the top spot in the financial advisor ranking for deals with any Sub-Saharan African involvement during Q1 2021.

EQUITY CAPITAL MARKETS

Sub-Saharan African equity and equity-related issuance reached just US$18.4 million during the first quarter of 2021, the lowest first quarter total since 1999.  Only Nigeria payments processing firm eTranzact raised new equity funds from its follow-on offering.  There were no initial public offerings. PAC Capital, Meristem Securities and Standard Bank Group share first place in the Sub-Saharan African ECM underwriting league table during the first quarter of 2021.

DEBT CAPITAL MARKETS

Sub-Saharan African debt issuance totalled US$12.1 billion during the first quarter of 2021, up 36% from the value recorded during the same period in 2020 and the highest first quarter total since 2018.  The number of issues declined 6% over the same period.  With Ghana’s government’s Eurobond raising US$2.9 billion and The African Development Bank’s $2.5 billion 5-year Benchmark bond, March 2021 saw more proceeds raised from bond issuance in Sub-Saharan Africa than any other month since May 2018, a total of US$7.4 billion.  Government & Agency issuance accounted for 64% of proceeds raised during the first quarter of 2021. Standard Chartered took the top spot in the Sub-Saharan African bond book runner ranking during the first quarter of 2021, with US$1.4 billion of related proceeds, or an 11.5% market share.

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Merger and Acquisition

Kirkland & Ellis Leads M&A Legal Adviser in Q1 2021 Says GlobalData

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Kirkland & Ellis lead the table of legal advisers for mergers and acquisitions (M&A) deals in the first quarter of 2021, according to the latest data from GlobalData, a leading data and analytics company.

The leading legal adviser led both in terms of deal value and volume following the successful completion of 213 deals valued at $132.3 billion in the first quarter of 2021. 

During the quarter, Kirkland & Ellis was the only adviser that advised on over 200 deals during the first quarter of the year, this was in addition to 32 deals worth over or equal to $1 billion the company advised on.

Aurojyoti Bose, a lead analyst at GlobalData, said: “Kirkland & Ellis was the only adviser that managed to advise on more than 200 deals during Q1 2021. The firm also advised on 32 deals worth greater than or equal to $1bn, and was among the few advisors that managed to surpass the $100bn mark.

“Kirkland & Ellis witnessed 36.5% growth in deal volume and 48.2% growth in deal value during Q1 2021 compared to Q1 2020. This growth, coupled with involvement in big-ticket deals, helped the firm top the list.”

Sullivan & Cromwell followed with 36 deals worth $120.1 billion while Paul Weiss Rifkind Wharton & Garrison came third with 52 deals worth $114.9 billion. In fourth place was Simpson Thacher & Bartlett with 51 deals worth $113 billion.

Latham & Watkins occupied the second position by volume with 119 deals worth $111.9bn, followed by Jones Day with 92 deals worth $27.9bn and Goodwin Procter with 85 deals worth $34.5bn.

Bose adds: “Akin to Kirkland & Ellis, the majority of the top 20 advisors witnessed growth in both deal value and volume in Q1 2021 compared to Q1 2020, which could be indicative of a revival of optimism for deal making.”

Of the top 20 advisers by total deal value, 18 witnessed growth in value in Q1 2021 compared to Q1 2020.

Further, 12 of the top 20 advisers by total number of deals witnessed growth in advised deal volume in Q1 2021 compared to Q1 2020.

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