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By Marine Cole
Merger and acquisition activity continued to be focused in the healthcare and technology sectors this week, while the portion of cash-only deals is going up so far this year.
Cash-only transactions account for more than $285 billion, or 34 percent of all transactions, according to data from Thomson Reuters. Cash-only M&A are up 34 percent from the same period last year, while total M&A transactions are up 22 percent. Stock-only transactions total $112 billion, up 92 percent in value from the same period last year, and account for 13 percent of all M&A deals.
Some of the companies that announced cash-only deals this week included Abbott Laboratories, Symantec and Honeywell. Abbott Laboratories said it is acquiring India's Piramal Healthcare's branded generics business for $3.72 billion. The deal is the third largest inbound acquisition in any sector in India, behind Japanese drug-maker Daiichi Sankyo's $4.2 billion takeover of Ranbaxy in 2008, according to Reuters. Abbott is funding the deal with cash from its balance sheet and said the transaction won't impact earnings.
In the tech sector, Symantec agreed to buy Verisign's authentication services business, which encrypts online payments, for $1.28 billion in cash. Honeywell, for its part, agreed to buy French personal protection equipment maker Sperian Protection for $1.4 billion in cash.
Healthcare companies continue to be key targets, especially in the private equity sector. This week's $2.1 billion acquisition of Healthscope by a group of investors--including the Carlyle Group and TPG Capital--is the third largest PE-backed transaction in 2010, according to Thomson Reuters. The healthcare industry accounts for 11 percent of total PE-backed transactions, up ten-fold from the same period last year. Still in healthcare, Universal Health Services acquired Psychiatric Solutions for $3.1 billion.
In the bond market, issuance from corporates continued to be sporadic due to uncertainty surrounding fiscal woes in Europe. Yet, the World Bank issued its second-largest offering on record.
The World Bank sold $4.5 billion of medium-term notes this week, after a $6 billion offering in March 2009. So far this year, the agency has issued $13.5 billion of global debt, just 30 percent below 2009's full year total of $19.9 billion. But the World Bank's debt offering wasn't the largest this week from a supranational issuer, as Canada Trust Housing issued $4.9 billion of debt.
Globally, there have been 254 supranational offerings so far this year raising $90 billion, the highest year-to-date number of offerings on record and the second largest by value after the same period in 2009.
The largest debt transaction from a corporate this week was a $3 billion deal from PetroChina, which is rated investment grade.
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