Third500 Weekly Market Highlights - June 3, 2020
Posted on 3th June 2020 in ANNOUNCEMENT

Third500 Weekly Market Highlights - June 3, 2020

Published:  Wednesday, 3rd June 2020

In the News

North America

  • Sanofi launched a $13 billion sale of its 21% stake in Regeneron Pharmaceuticals Inc., a New York-based biopharmaceutical firm. Regeneron agreed to buy back about $5 billion of stock while the remaining $7 billion was sold to public investors in the largest public equity offering in the heathcare industry on record – Bloomberg
  • Gym owner 24 Hour Fitness Worldwide Inc., operator of more than 430 mid-tier gyms, is preparing for a potential Chapter 11 filing to cut its debt – CNBC
  • Activist investor Bill Ackman said he has exited his investments in Warren Buffett’s Berkshire Hathaway Inc. as well as his recently acquired investments in the Blackstone Group Inc. and Park Hotels & Resorts Inc., said in a conference call on Wednesday.


  • Pub group Marston's and the UK arm of brewer Carlsberg have announced plans to form a joint venture beer company worth £780 million – Guardian
  • Volkswagen in final talks to seal biggest M&A deals in China through a 50% acquisition of Anhui Jianghuai Automobile Group Holding, the parent of EV partner JAC Motors - Reuters


  • ByteDance, the Chinese owner of video-sharing service TikTok, posted a $3 billion net profit last year as revenue more than doubled to $17 billion – Bloomberg
  • Temasek is in talks for a potential investment of at least $400 million in Singapore shipping tycoon Chang Yun Chung’s Pacific International Lines Pte – Bloomberg

VC Highlights


VC environment continues to be supportive of early-stage companies in their fundraising through these uncertain times.  Although the number of deals declined both WoW and MoM,  capital invested in the space continues to remain strong, in fact, recent weeks have seen more capital deployed over a four-week period than during pre-COVID lockdown.


Although VC deal count continues to trend lower, falling below 1,000 deals for the first time since 2017, invested capital remains strong.   Over $22 billion has been put to work in the VC space, a 2.5% YoY, and 28.8% MoM increase.   It must be noted that Waymo’s $3 billion transaction accounts for over 10% of total invested capital in May, regardless it doesn’t change the story.

Select VC Transactions

  • Higi:  The operator of self-screening health station network intended to facilitate self-diagnosis and health tracking raised $30MM of Series B venture funding led by Babylon Health
  • Nice Tuan:  The China-based operator of a community e-commerce platform offering daily groceries and miscellaneous products raised $81.4MM of Series C venture funding le by GGV Capital.  The company counts Alibaba group among its early investors.

PE Highlights


On the surface invested capital in private equity deals may have picked up, but two-thirds of the $6 billion deployed were split between three transactions; deal count continues to show weakness suggesting the pickup isn’t broad-based.  Nonetheless, trailing-four-weeks invested capital increased by 27% and  43 deals closed is an encouraging improvement from March and early April.


May turned out to be the slowest month for private equity in deal volume terms since the GFC and the slowest in capital investment terms going back to February 2012.  The capital getting deployed remains relatively concentrated with the top five deals in May accounting for over half of the total value.

Select PE Transactions

  • CarTrawler: A developer of a B2B travel technology platform in Ireland was acquired by TowerBrook Capital Partners in a EUR 100MM LBO; the seller, two PE firms, had acquired the company in 2014 for ca. GBP 340MM in 2014
  • Vesta Payment Solutions:  Provider of integrated payment and risk platform designed to combat fraud while increasing acceptance was acquired by Goldfinch Partners in a $125MM LBO

M&A Highlights

This week saw M&A transaction volume decrease however such a figure is 30% higher MoM thanks to a low base in April; meanwhile invested capital declined 34% MoM.  Of the $8 billion deployed through M&A this week, almost the entirety was attributed to the $7.4 billion acquisition of WABCO.  M&A transactions remain the weakest space among the three investment types that we follow, perhaps to no surprise.

Despite showing a solid $97 billion in total M&A value in May, two-thirds ($63 billion) of the figure was thanks to the completion of AbbVie's acquisition of Allergan which was a long time in the making.  In general, the M&A environment for the month of May remains relatively quiet; invested capital declined 48% versus the same time last year – this includes the Allergan transaction.  Breaking down the M&A environment in May we see close to 70% of the transactions concentrated in healthcare thanks to Allergan, followed by 10% in Energy as the sector continues to consolidate.

Select M&A Transactions

  • ‚ÄčCorrevio Pharma:  A specialty pharmaceutical company  with therapeutic solutions for acute bacterial skin and skin structure infections, among other indications, was acquired by Advanz Pharma for $76MM
  • Reliva:  The distributor of CBD based products that specialize in cream, pet tincture, lip balm, oral sprays, and gummies was acquired by Aurora Cannabis for $40MM with a contingent payout of $45MM over the next two years
  • Heath Scientific Company:  The distributors of analytical tools in  calorimetry was acquired by Judges Scientific for $9.02MM and a contingent payout of $2.0MM

Special Report

A Look at the Market’s M&A Reports

Amidst uncertainties with regards to global economic conditions and the talks of solvency risks looming the wider corporate world, we took a quick look at some of the leading firms’ publicly available reports on M&A Outlook.  Some of the reports featured were published prior to the global spread of COVID-19 while some had been post-COVID; the timing splits two realities apart.

1. COVID-19’s Impact on Global M&A – BCG (link)

  • IPO and LBO deals likely to be shelved for several months
  • M&A activity was already on  a slight downward trend, this is likely to accelerate
  • Historically M&A activities have correlated with the evolution of stock prices and risk (implied vol)
  • Deals done during weak economic times create value for dealmakers and their shareholders; this is not only driven by valuations but also by lower demand for premiums

2. The state of the deal:  M&A Trends 2020 – Deloitte (link)

  • M&A Trend Survey shows participants expect M&A activities to continue in 2020 with only 4% forecasting decline in the next 12 months (Survey pre-COVID)
  • Factors fueling the deal-making boom is both corporates and PEs $1.55 trillion in cash reserves
  • Roughly half of the PE investors surveyed expect exits coming from strategic sale
  • Strategic drivers:  acquire new technology, adding products to the portfolio, seeking smaller strategic deals to take advantage, and global expansion

3. 2020 Global M&A Outlook – JPM (link)

  • Global M&A slowed in 2019, North America volume up 10% while EMEA and APAC down 13% and 6% respectively
  • N. America growth was driven by mega-deals (+$10BN); of the 47 mega deals announced in 2019, 36 were in N. America
  • Two-thirds of the mega deals announced in N. America were in H1 2019 before concerns of slowdowns surfaced in H2 2019
  • Most M&As were a merger of equals (MOEs); 63% of non-MOE transactions are all-stock with only 12% all-cash transactions
  • U.S. corporates are preparing for a recession as cross-sector M&A fell to 26% from 36% in 2013

Going into 2020 most market participants saw conditions in the M&A space not as spectacular but expected somewhat of the same deal-making environment.  That narrative changed dramatically after the pandemic hit with surveys showing corporate executive confidence collapsing and ample dry powder, particularly in PE funds, likely to remain on the sidelines.

Other reports of note

  1. Global Transactions Forecast 2020 (Healthcare & Life Sciences) – Baker McKenzie (link)
  2. Corporate M&A Report 2020 – Bain & Company (link)
  3. North America M&A Report Q1 2020 Annual – Pitchbook (link)



Jane Phornprapha, President

David Benkert, Analyst


Disclaimer: You are free to use any data or commentary from this report in your articles as long as the source is cited as “Data provided by Pitchbook; report published by Third500 LLC”


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