DealRoom’s M&A lifecycle management software has been adopted by world-class organizations to play a host to hundreds of deals across virtually every industry over the past decade.
Analysts are divided on how 2023 is set to play out, with projections ranging anywhere from a lull in activity to a historical high for M&A transactions.
Below we look at some of the deals agreed in 2022, which are set to close in 2023.
1. L3Harris acquisition of Aerojet Rocketdyne
Deal Value: $4.7 billion
Date Agreed: December 19, 2022
Industry: Aerospace
The U.S. defense contractor market, already heavily weighted towards the biggest players, is set to become even more consolidated thanks to the L3Harris Technologies $4.7 billion acquisition of Aerojet Rocketdyne.
The transaction, which was announced in December, closes the curtain on a two-year back-and-forth between Aerojet Rocketdyne and a number of suitors, which included Lockheed Martin, General Electric, and others.
L3Harris believes the acquisition will bring two the most innovative R&D teams in the industry together as well as delivering a range of operational cost savings.
2. Amgen acquisition of Horizon Therapeutics
Deal Value: $26.4 billion
Date Agreed: December 12, 2022
Industry: Biopharmaceuticals
The biggest biopharma transaction of the year was left right until the end, with Amgen’s proposed $26.4 billion acquisition of Horizon Therapeutics. Horizon Therapeutics focuses on treatments for rare, autoimmune diseases such as thyroid eye disease (TED), gout, and several inflammatory diseases.
The most well-known drug produced by Horizon Therapeutics is its best-seller, Tepezza, which treats eye bulging and double vision. The price of $116.50 offered to Horizon’s shareholders was a 48% premium to Horizon’s price of slightly under $79 when the deal was first announced in November.
The acquisition is Amgen’s third in rare diseases and seems to point at a strategy shift for the biopharma giant.
3. Thoma Bravo acquisition of Coupa Software
Deal Value: $8 billion
Date Agreed: December 12, 2022
Industry: Software
The much-talked about 2022 tech slump didn’t dissuade Thoma Bravo from taking Coupa Software prive in an $8 billion all-cash transaction in December. Coupa is a cloud-based business software firm, whose shareholders before the deal closed included the Abu Dhabi Investment Authority (ADIA).
The price of $81 per share in cash represented a 77% premium to the unaffected stock price. On closing, the Coupa Software management team stated that they had weighed the options of continuing as a standalone business or accepting the Thoma Bravo offer, and accepting was the clear winner, giving the company access to the latter’s resources as well as “accelerating the vision to transform the office of the CFO.”
4. Johnson & Johnson acquisition of Abiomed Inc.
Deal Value: $18.04 billion
Date Agreed: November 1, 2022
Industry: Pharmaceuticals
Johnson & Johnson, the world’s largest healthcare products company announced at the beginning of November that it was to acquire Abiomed, a world leader in heart, lung, and kidney support technologies.
The price of $380 per share agreed between the two firms represents a 50% premium over Abiomed’s trading price at the time the deal was announced. Johnson & Johnson pitched the deal as positioning it as an innovator in the cardiovascular space, what it described as one of healthcare’s largest unmet disease states: heart failure and recovery.
J&J’s stock price spiked by close to 8% on the deal’s announcement suggesting investors think this has deal promises big things for the healthcare giant.
5. Japan Industrial Partners Inc., Suzuki Motor Corp. and ROHM Co. Ltd. acquisition of Toshiba Corporation
Deal Value: $16.23 billion
Date Agreed: Under discussion
Industry: Technology (diversified)
It may come as a surprise to many that Toshiba Corporation, the world-renowned Japanese diversified technology manufacturer is in financial dire straits. A conglomerate that includes Japan Industrial Partners (JIP) is currently in talks with banks and other finance providers to ensure that it has the resources to bring Toshiba private in 2023.
Toshiba’s businesses include everything from nuclear power to defence technology and microchip manufacturing. Any potential acquisition would be another nail in the coffin of the famed keiretsu, the group of Japanese conglomerates that once looked set to take over the world one business at a time.
6. Broadcom acquisition of VMWare
Deal Value: $61 billion
Date Agreed: May 22, 2022
Industry: Semiconductor
The scale of Broadcom’s proposed acquisition of VMWare, first announced in May 2022, underlines why the deal is only projected to close in 2023. Broadcom has spent the second half of 2022, conducting due diligence and communicating the benefits of the deal to VMware’s customers and partners.
The deal was sold to these stakeholders on the basis of VMware’s multi-cloud offerings and Broadcom’s diversified software portfolio, creating a sort of one-stop-shop for “the incredibly complex IT landscape” (to use Broadcom’s words).
Whether is a good strategy is anyone’s guess, with tech showing over the past few years that, in the long-term, innovation is a far more powerful value adder than integration.
7. Advent acquisition of Maxar
Deal Value: $6.4 billion
Date Agreed: December 16, 2022
Industry: Technology
The near $2 trillion of ‘dry powder’ that private equity firms have been sitting on for the past year or two is finally finding its way into public markets. A good example of this could be seen in December’s news that Advent was acquiring Maxar, a space infrastructure and imagery company in an all-cash deal.
At $53 a share, the price paid by Advent represented a 130% premium above where the stock had been trading.
In addition to providing excellent value to the Maxar shareholders, the executive team at the space infrastructure firm said that it would enable them to make vital investments in Legion seven and eight satellites and other technologies under development.
8. Keurig Dr. Pepper Inc. acquisition of Nutrabolt
Deal Value: $863 million
Date Agreed: December 9, 2022
Industry: Food and beverages
Although the smallest transaction on this list at under a billion dollars, Keurig Dr Pepper’s acquisition of Nutrabolt has been included as much because what it tells us about the evolving food and beverages industry.
While traditional food firms like Kelloggs are moving away from sugary breakfast cereals, traditional soft drink makers are moving towards what were once niche beverages.
Nutrabolt makes C4 Energy, C4 Pre-Workout and the Xtend brands. Although this wasn’t a full acquisition, Keurig Dr Pepper will become Nutrabolt’s second largest shareholder, and gives Keurig Dr Pepper an even larger footprint in the rapidly growing performance energy drink market.
Summary
The growing number of deals that fail to make it over the line suggests that at least one of the deals on this list may end up being scrapped in 2023.
A combination of economic conditions, shareholder unease with transactions, and inevitably, due diligence, puts a halt to many deals. Talk to DealRoom today about how our due diligence software can ensure that you understand your acquisition targets well before reaching the final stretch of the transaction’s life.
