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In 2022, M&A mergers and acquisitions were at a historic low due to fears of an impending recession and rising interest rates. The total value of deals fell 37% from 2021’s record high to $3.61 trillion, according to Refinitiv and the Wall Street Journal. This is the largest drop since 2001, when the value of global deals plunged 50% to $1.68 trillion.
At the beginning of 2023, companies have begun to adapt, changing the way that they structure deals to use market volatility to their advantage and minimize costs to the best of their ability. Throughout the changing economic times, FirmRoom has played a secure host to M&A, facilitating some of the biggest M&A deals in the industry.
Advisers predict that M&A will pick up further, and that 2023 may be a year of highly valued mergers and acquisitions. Here are the largest recent M&A deals predicted to or already closed in 2023.
Date: Agreed December 2022; closing March 2023
Value: $6 billion
UnitedHealth Group, an insurance provider that also provides healthcare services, is set to acquire LHC Group, a home healthcare provider, for $170 per share in cash. UnitedHealth will benefit from this deal by incorporating LHC into its Optum subsidiary as part of Optum Health, one of the country’s largest employers of physicians.
LHC Group already includes 30,000 employees providing more than 12 million in-home services. Optum Health will be able to provide a larger network of patients for LHC Group, and LHC Group will provide a larger network of skilled physicians. Further benefits include LHC Group’s home care focus and how that will enhance Optum’s value-based care capabilities in the home healthcare industry.
Date: Announced September 2022; closing early 2023
Value: $8 billion
CVS Health, a well-known distributor of pharmaceuticals, has acquired Signify Health, a leader in health risk assessments, value-based care, and provider enablement. Signify Health has a network of more than 10,000 clinicians across all 50 states and a nationwide value-based provider network, combined with its proprietary analytics and technology platforms.
Signify utilizes home-based visits to identify a patient’s clinical and social needs, then connects them to follow-up care and community-based resources so the patient can have a more connected, effective care experience. They will benefit from engaging with CVS Health’s collection of assets and methods of connecting patients to care how and when they need it.
CVS will benefit from this deal by advancing their health care services strategy and providing a platform to accelerate growth in value-based care. As value-based care is a fast growing industry, this is a smart tactical move for CVS.
Date: January 2023
Value: $86 million
Leap Therapeutics, a biotechnology company focused on developing targeted and immuno-oncology therapeutics acquired Flame Biosciences, a privately held biotechnology company, with the goal of taking control of Flame’s current product pipeline, including a clinical-stage antibody and two other preclinical candidates.
This will add a second gastro-cancer treatment to its lead asset, as well as increasing the combined cash balance to $115 million, fully funding their drugs in progress. Leap’s stock has been in decline for the last year, but has started to rebound after news of the acquisition. The company will be taken over entirely by Leap.
This will be beneficial for Flame, as the expert development team at Leap will be able to develop the preclinical assets held by Flame and get them to the level where they will be able to help those who need them.
Date: Agreed December, 2022
Value: $4.7 billion
L3Harris, a global defense and aerospace firm, acquired Aerojet Rocketdyne, a manufacturer of rocket engines and propulsion systems for space vehicles, ballistic missiles, and military tactical weapons. This deal constitutes a horizontal, rather than a vertical, integration of two important components of related, but not identical, industries.
The expected benefit from this transaction is largely operational cost savings, totaling about $50 million. L3Harris has also recently acquired Viasat’s tactical data links business, showcasing the progress that this company is making and the direction that they are hoping to move into. However, this deal is still being reviewed by FTC regulators and the DoD.
Date: Agreed December 2022
Value: $26 billion
Amgen is a biopharmaceutical company working to discover, develop, and manufacture pharmaceutical products. Horizon Therapeutics focuses on treatments for rare, autoimmune diseases such as thyroid eye disease, gout, and several inflammatory diseases. Its best-selling drug is Tepazza, treating eye bulging and double vision. Amgen acquired Horizon Therapeutics at a price of $116.50 per share, a 48% premium of Horizon’s stock prices.
This is Amgen’s third acquisition in rare diseases, and will benefit Amgen with a strategic shift in becoming a pharmaceutical giant. Horizon will benefit from this recent deal by making their treatments more widely available and also financially lucrative.
Date: Agreed December 2022; closing early 2023
Value: $8 billion
Thoma Bravo, a leading software investment firm, acquired Coupa Software, a leader in Business Spend Management, in an all-cash transaction of $81 per share, 77% above the stock price. Coupa Software is known as a market-leading platform in their industry, and will benefit from the acquisition by digitally transforming the CFO office.
The transaction was evaluated against the company’s standalone prospects in the current economic climate, and it was determined that the benefits outweighed the risks. Thoma Bravo expects Coupa Software to be a beneficial investment for them as well in terms of product strategy and growth through M&A. Thoma Bravo will enable Coupa to drive innovation and accelerate growth throughout the acquisition.
Date: December 2022
Value: $18 billion
Johnson & Johnson, the leading global healthcare company, acquired Abiomed, a leader in heart, lung, and kidney support technologies. This was a share purchase at $380 per share, a 50% premium over Abiomed’s trading price at the time of deal announcement.
Abiomed will function as a standalone business within the MedTech segment of J&J, and will be benefitted by the market that J&J has to offer, as well as their financial status. Johnson & Johnson will benefit from this deal as the company will be able to venture further into the cardiovascular space, focusing on solutions for heart failure and recovery.
The stock price of Johnson & Johnson rose by 8% after the deal announcement.
Date: Announced November 2022; Projected to be finalized March 2023
Value: $16 billion
Japan Industrial Partners, Suzuki Motor Corp., and ROHM Co. are a conglomerate that have been in discussion with banks and other finance providers regarding the acquisition of Toshiba Corporation. Toshiba is a company with a wide array of offerings, including nuclear power, defense technology, and microchip manufacturing that has recently fallen into financial hardship.
This acquisition will benefit Toshiba by keeping the company and the resources it provides alive; Japanese Industrial Partners would benefit as it will be in direct competition with other Japanese conglomerates. Japan Industrial Partners and co. plan to acquire and reconstruct Toshiba with a combination of shares and bank loans.
Date: Announced May 2022, to be completed in early 2023
Value: $61 billion
Broadcom, a global technology leader known for designing, developing and supplying semiconductor and infrastructure software solutions, acquired VMware, a leading innovator in enterprise software focusing on multi-cloud services for apps and virtualization technology. This was a cash-and-stock transaction that also involved Broadcom assuming $8 billion of VMware’s net debt.
After the acquisition is completed in early 2023, Broadcom will rebrand and operate as VMware, incorporating Broadcom’s infrastructure and security software solutions as part of an extended VMware portfolio. This will provide increased value by offering an expanded platform of critical infrastructure solutions to accelerate innovation and address complex technological needs. Customers will be enabled with greater choice and flexibility to build, run, manage, connect, and protect applications.
Date: December, 2022
Value: $6.4 billion
Advent, a global private equity investment company, acquired Maxar, a space infrastructure and imagery company, in an all-cash deal at $53 per share. This is a 129% premium to the prior closing price. Advent will benefit Maxar with their 35 year investment track record and significant experience in global security and defense.
This acquisition will also support Maxar to accelerate investment in and development of the company’s next-generation satellite technologies and data insights for customers. This includes delivery of the new Legion satellite constellation, accelerating the launch of Legion 7 and 8 satellites, and growing the Earth Intelligence and Space Infrastructure businesses through investments in next-generation capabilities, such as advanced machine learning and 3D mapping.
Maxar will also benefit Advent by providing a solid investment with increasing opportunities.
Date: December 9, 2022
Value: $863 million
Industry: Food and Beverage
Keurig, a leading producer of beverages, acquired Nutrabolt, an actively growing health and wellness company that makes C4 Energy, C4 Pre-Workout, and the Xtend brands. With this acquisition and sales and distribution agreement, Keurig will sell and distribute C4 Energy in the majority of Keurig’s company-owned direct store distribution territories, increasing retail availability and household knowledge for the brand while increasing profits for Keurig.
This will not be a full acquisition, however, as Nutrabolt will continue distributing C4 Energy directly to specialty, health club and fitness channels. Value will be added to both companies, as Keurig will gain presence in the energy drink market and Nutrabolt will gain access to a strategic investor with sales and distribution capabilities to further accelerate growth.
Date: November 2022
Value: $24.6 billion
Description: Kroger Co., announced plans to acquire Albertson’s, a rival grocery chain, in late 2022. This acquisition would establish Kroger stores in 48 states and create a supermarket chain to compete with Walmart and Amazon, non-grocery companies that have posed competition with their grocery offerings and overall monopolies. Kroger hopes to reduce food inflation by creating a stronger combined company to have negotiating power to push back against food producers’ proposed price increases.
Kroger also hopes to drive profitability and enhance shareholder returns, while enhancing customer experience and increasing associate wages and benefits. Overall, this acquisition will bring together two purpose-driven organizations to deliver increased value while promoting equitability and sustainability in the grocery industry.
Date: November 2022
Value: $20 million
RegScale is a developer of governance, risk, and compliance software that acquired GovReady, a compliance-as-code platform. RegScale utilizes an API-centric software platform to integrate with existing security and compliance platforms to dynamically manage the security control state, shifting compliance left to deliver audit-ready documentation on demand in a real-time Governance, Risk, and Compliance Platform.
GovReady provides self-service cyber assessments for faster, more agile compliance; it allows for the creation of user-friendly, web-based self-service compliance experiences mapping system components and organizational processes to security controls.
The two companies are early adopters of NIST’s Open Security Controls Assessment Language (OSCAL), which is used for representation of control catalogs and system security plans in machine-readable format. This acquisition furthers the commitment of RegScale to bring compliance from a point in time to a continuous, near real-time experience.
Date: October 2022
ServiceNow, a digital workflow company, acquired the observability and log management innovator, Era Software. Era Software will add value by helping to provide customers with a unified observability solution, where customers will be able to gather actionable insights that deliver value across the business within a single solution. Essentially, the purchase of Era Software will help customers improve the performance of tools built on the ServiceNow platform.
ServiceNow plans to combine the capabilities of Era with those of Lightstep, a company it acquired in May 2021 that forms the basis of its main observability platform. ServiceNow is pursuing a vision of “unified telemetry” that spans logs, metrics and traces, and Era is one in a series of recent acquisitions that help to shape that vision.
Date: June 2022
Value: $28.3 billion
Oracle acquired the medical software maker Cerner Group in a $95 per share, all-cash transaction, valuing Cerner at $28.3 billion. Oracle will benefit from this acquisition, as adding a healthcare component provides substantial accretive to Oracle’s earnings.
As stated by Oracle’s CEO, healthcare is the world’s largest and most rapidly growing vertical market. Oracle will work to change the user interface for Cerner’s systems by making hands-free voice technology the primary interface to Cerner’s clinical systems. Oracle’s shares have increased by 20% since completion of the acquisition.
Date: October 3 2022
Value: $23 billion
Industry: Real Estate
Description: Prologis, Inc. is a real estate investment trust who acquired Duke Realty in an all-stock transaction. The aim of this acquisition was to expand the presence of Prologis in U.S. markets, as well as create avenues for further earnings growth and customer support.
This will establish a platform to deliver end-to-end solutions addressing critical supply chain challenges and contributing to sustainability efforts. Shares of Prologis have increased 9% since announcement of the deal.
These are only a few of the largest M&A deals expected to close in 2023. As more industries, such as biotechnology and biopharmaceuticals, that have not traditionally been involved in M&A deals, start to dip their toes in the water of mergers and acquisitions, the industry will continue to diversify and grow.
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