Mergerstat Review Frequently Asked Questions (FAQs)

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Learn about the new changes in the 2018 edition - Download a PDF of the Mergerstat Review Q&As

Q: Why do I need the 2018 Mergerstat Review?

A: Merger and acquisition (M&A) activity continued at a rapid pace over the past year. You need the 2018 Mergerstat Review as your go-to source for M&A statistics, analysis, trends, and deal data by industry. Mergerstat Review is the leading publication to capture all the information for U.S. and cross-border transactions annually. The 2018 Mergerstat Review delivers comprehensive transaction rosters, along with vital data and statistics on the 2017 M&A transactions that involved both publicly traded and privately held companies.

Q: How is this year’s publication different from previous editions?

A: We are pleased to announce five changes to the 2018 Mergerstat Review, which will improve your experience and provide greater transparency with the data.

• Historical updates were completed to 20 years of M&A data. These updates include aggregate volume and value totals, as well as the respective pricing multiples associated with the year’s data.
  
  
• FactSet has retired the 50-category Mergerstat industry classifications in favor of its 20-category industry sectors. For FactSet Mergers database subscribers, it means they are now aligned with FactSet’s database screening taxonomy when searching for transactions either in the Mergerstat Review or the online database. For those who do not subscribe to FactSet Mergers, an SIC-to-FactSet-sector mapping is provided.
  
  
• Foreign seller ownership roles are more clearly defined. In prior editions, seller ownership roles were classified as either public, private, divestiture, and foreign. The Mergerstat Review now breaks down the seller ownership into the two groups:
  
  • Domestic transactions: public, private, and divestiture; and
    
  • Foreign transactions: public, private, and divestiture.
    
    
• Deal pricing has been changed from base equity price to transaction value. The switch was done to better reflect the debt associated with the purchase.
  
  

• Transaction premiums still feature the premium paid for the targets’ share prices five days prior to the announcement, but the Mergerstat Review now has four new tables that focus on premiums paid over the targets’ enterprise values.

Q: What’s the difference between transaction value and enterprise value?

A: The Mergerstat Review now details the purchase price of transactions as the “transaction value” price rather than the base equity price. The “transaction value” accounts for the base equity price plus the same net debt value used in the calculation of enterprise value, but with the following conditions:

• The transaction is a 100% acquisition; and
  
  
• The acquired company is not a bank, insurance company, or finance company. These companies will continue to use the base equity price as the purchase price. This change solves the issue in valuing financial institutions when deposits and other debt-related securities are
  not valid forms of debt in accounting for enterprise value, a pricing method that overstated values of financial targets. Enterprise value also accounted for debt in the purchase of minority stake transactions, which overstates the cost to the purchaser when debt isn’t likely assumed.
  So the default is now as follows:
  
  • Minority or majority stake purchase: Transaction value = base equity; and
    
  • Full acquisition in a nonfinancial industry: Transaction value = base equity + net debt.

Q: With the change from Mergerstat industry classifications to FactSet sectors, how will a user find relevant transactions?

A: On pages 85 and 361 of the 2018 Mergerstat Review, a directory maps the selected SIC code with the relevant FactSet sector.

Q: Will users be able to navigate through the 2018 Mergerstat Review the same as prior editions?

A: Yes. The 2018 Mergerstat Review features a revised table of contents page that provides users with the same ease of use as in prior editions. While most of the tables and charts remain the same, the table of contents references the tables and charts from the prior year’s publication so users can find the exact same table in the 2018 Mergerstat Review, if the table or chart number changed.

Q: Why were changes made to the 2018 edition?

A: BVR was given full access to the dynamic FactSet Mergers M&A data feed for publishing purposes. As a result, we were able to update 20 years of M&A data that captures new and updated transaction data that were collected after the publishing date of prior editions. In prior editions, the published year’s M&A data was produced from an “as of” date, meaning additions and changes were not reflected in the publication. In addition, no historical updates or changes were made to the publication, despite the information becoming publicly available and collected at a later date. The 2018 Mergerstat Review is the first edition to feature historical updates. BVR is publishing M&A data that are more transparently accurate and overall better reflect prior years’ M&A activity.

Furthermore, the addition of the four new premium tables is offered in response to client feedback we received. Your input is important to us, and, from the feedback we have received, we added four new tables that focus on premiums paid over enterprise value.