The number of terminated private equity-backed deals globally fell 86.2% year over year to just four in the second quarter, according to data from S&P Global Market Intelligence.
The decrease in terminated deals suggests a stronger closing momentum in recent periods, as buyers and sellers bridge valuation gaps more effectively.
In 2023, private equity relied on earnout provisions to address valuation challenges. The provisions became less common as sales processes grew competitive, and the economy appeared to be on track for a soft landing, helping to bridge the persistent gap between buyers and sellers in the M&A market.
Canceled private equity transactions are mirroring the broader decline in overall terminated M&A deals. The number of terminated M&A deals without private equity involvement tumbled 77.8% year over year to just 34, marking the lowest quarterly figure since at least 2021.
The dollar value of the terminated private equity deals declined to approximately $2.84 billion in the second quarter, down from $14.43 billion in the same period of 2023, Market Intelligence data shows.
In terms of overall M&A, the value of canceled deals in the second quarter rose to $62.88 billion versus $42.81 billion in the year-ago quarter.
– Download a spreadsheet with data in this story.
– Read the first-quarter story on terminated private equity-backed deals.
– Check out the latest on private equity dry powder growth.
Largest terminated deals
Three of the four terminated private equity deals involved valuation disagreements.
In the biggest terminated deal of 2024 to date, a consortium led by Kimmeridge Energy Management Co. LLC planned to sell SilverBow Resources Inc., an oil and gas company, to Kimmeridge Texas Gas LLC for $2.24 billion. However, SilverBow turned down the offer in March, citing it as an undervaluation of the company.
Valuation issues led to the cancellation of another major deal in the first quarter. The second-largest canceled deal involved Australia-based human and health services provider APM Human Services International Ltd., whereby CVC Capital Partners Ltd. offered $1.82 billion to acquire it from Madison Dearborn Partners LLC.
APM initially rejected CVC's A$1.60-per-share offer, viewing it as undervalued. CVC then raised its bid to A$2 per share, a nearly 25% increase. In March, APM requested a trading halt pending an update on CVC's inability to finalize a transaction on terms consistent with its nonbinding offer, and the ending of CVC's exclusivity period.
CoreWeave Inc.'s $1.8 billion bid to acquire digital asset mining services provider Core Scientific Inc. for $5.75 per share in cash was rejected by the company's board in June, citing significant undervaluation.
In the fourth terminated deal, Greenoaks Capital Partners LLC and Long Path Partners LP offered about $840 million to acquire 79.7% of Sweden-based information solutions provider Karnov Group AB. However, the number of Karnov shares tendered by the deadline fell short of the 90% threshold necessary for completion, prompting the offer's withdrawal in June.
Among the four private equity-backed deals that failed to close in the second quarter, two transactions involved private equity firms as the buyers. The other two transactions recorded private equity firms as the sellers.
