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Analysis

US divestitures update: Q2 2023

Despite a slower start in Q1 2023, the divestitures market experienced significant growth in Q2 2023, with companies looking to reorganize resources through carve-outs and spin-offs.

Industrial trends

Our quarterly report focuses on:

  • US divestiture volume, value, and reported multiples.
  • US divestitures by buyer type.
  • US divestitures by industry.
  • Cross-border divestitures activity.

Transaction Trends1
 
  • Transaction volume
    Divestiture transaction volume increased significantly in Q2 2023 compared to Q1 2023. Number of deals reached 528 in Q2 2023 compared to 286 deals in Q1 2023, a growth of 84.6% quarter over quarter, while overall M&A activity grew by only 11.3%.
  • Transaction size
    In Q2 2023, transactions with deal values above $1 billion accounted for 29.2% of the total disclosed deal volumes compared to 0 deals in Q1 2023. Deals with values less than $250 million accounted for 52.1% of deal volume compared to 71.4% in Q1 2023.
  • Acquiror type
    Domestic strategic buyers accounted for 52.8% of buyers in divestiture transactions in Q2 2023 compared to 73.1% in Q1 2023. Interest from private equity buyers for divestitures, witnessed significant growth, accounting for 28.8% of the buyers in Q2 2023, compared to 1.8% in Q1 2023.
  • Industry focus
    Technology once again emerged as the sector of focus for divestitures in Q2 2023, making up 16.5% of all divestiture transactions, followed by Financial Services at 13.1% and Energy & Power with 12.1%.

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Regional trends2
  • Europe
    Deal activity among European acquirors witnessed extraordinary growth in Q2 2023, growing by 216.7% quarter over quarter. They participated in 38 deals in Q2 2023 up from 12 in Q1.
  • Americas
    Divestiture activity in the Americas almost doubled in Q2 2023 compared to Q1 2023. The Americas completed 436 transactions in Q2 2023 compared to 229 transactions in Q1 2023.
  • Asia
    Divestiture activity in Asia witnessed a 45.5% quarter over quarter increase in Q2 2023 compared to Q1 2023. Asian acquirors closed 16 deals in Q2 compared to 11 in Q1.

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References

1Refinitiv data, as of July 12, 2023.
2Ibid.

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