Mergerstat Review Frequently Asked Questions (FAQs)
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Q: Why do I need the 2021 Mergerstat Review?
A: Merger and acquisition (M&A) activity continued at a rapid pace over the past year. You need the 2021 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 information for U.S. and cross-border transactions annually. The 2021 Mergerstat Review delivers comprehensive transaction rosters, along with vital data and statistics on the M&A transactions, including premiums and multiples paid, that involved both publicly traded and privately held companies.
Q: What’s new in the 2021 Mergerstat Review?
A: We have listened to our customers and have continually expanded upon the Mergerstat Review publication. The 2021 edition will include Special Purpose Acquisition Company transactions, otherwise referred to as “SPAC” transactions. With the buzz in 2020 about these blank check transactions, the Mergerstat Review will highlight volume and value.
In addition to the United States transaction rankings, the 2021 edition will include data highlighting global transaction rankings that were first introduced in the 2020 edition. These include:
- Top Canada
- Top United Kingdom
- Top Asia
- Top Latin America
- Top European Union
Q: The 2019 Mergerstat Review included a supplement which added back the Industry Analysis found in chapter two, will this be included in the 2021 edition?
A: BVR is pleased to announce that we have reincorporated the industry analysis section found in chapter two back into the 2021 Mergerstat Review. The 2021 edition will include both the FactSet sector analysis and Mergerstat industry analysis section in chapter two, allowing users to choose from either section in performing their M&A transaction analysis. Including both sections will allow FactSet Mergers database subscribers to conduct their screening searches the same as they would in the in either in the Mergerstat Review or the online database. For those who do not subscribe to FactSet Mergers, a SIC-to-FactSet-sector mapping is provided.
Q: What’s the difference between transaction value and enterprise value?
A: The Mergerstat Review 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: Will users be able to navigate through the Mergerstat Review the same as editions prior to 2018?
A: Yes. While most of the tables and charts remain the same prior to 2018, click here for a map that references the tables and charts from the prior years' publications so you can easily find the exact same table in this year's publication. The map shows if the table or chart number changed.
Q: Why were changes made starting with 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 was the first edition to feature historical updates. BVR is now 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 are 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.
Q: How did Mergerstat Review change starting in 2018 and going forward?
A: There were four changes made to the Mergerstat Review from prior editions, starting in 2018. All changes were made to improve your experience and to 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.
- 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 was changed from base equity price to transaction value. The switch was done to better reflect the debt associated with assumed by the acquirer as part of 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.