Jefferies

Actionable Ideas for Companies and Sponsors

M&A-Related Equity Financing Continues to Grow

Equity offerings related to acquisitions represented 20% of all U.S. equity issuance in 2016, an increase of over 60% from the 2010 through 2015 average. This growing use of equity to finance M&A has been driven by clients broadening their use of equity financing across various phases of the M&A spectrum, including (i) pre-funding with no identified acquisition; (ii) concurrently funding with an acquisition announcement; or (iii) post-announcement funding to repay any temporary financing that was put in place. Investor receptivity to these offerings remains strong, as evidenced by minimal file-to-offer discounts, upsized transactions, and strong aftermarket performance.