Pittsburgh regional M&A update - First quarter, 2016

Economic and market data

Unemployment in the Pittsburgh region was estimated at 5.7 percent for the first quarter of 2016, above the national rate of 5.0 percent. The Pittsburgh region unemployment rate was 0.1 percent lower than it was in the first quarter of 2015.1

The first quarter of 2016 (Q1-2016) observed mixed financial results for the broader US equity market, as the S&P and DJIA close up 0.8 percent and 1.5 percent, respectively; while the NASDAQ closed down 2.7 percent for the quarter. The first quarter market results realized a large degree of volatility with market sentiment being driven by both political and economic uncertainties related to the US political cycle and softening macro growths expectations.

M&A activity

There were 41 reported M&A transactions during Q1-2016. Activity decreased from 59 transactions during Q4-2015. Q1-2016 also marked a decrease from 59 deals for the same period in 2015.

The aggregate deal value of the M&A transactions with reported values was $1.2 billion during Q1-2016. This is a decrease from the total deal value of $1.3 billion in Q4-2015. We would note that in the dramatic increases in aggregate deal values in Q2-2013, Q4-2013, Q1-2015, and Q3-2015 were driven by megadeals that closed in each respective quarter.

Pittsburgh regional market M&A activity: Aggregate transaction size and number of deals

Source: S&P Capital IQ and Baker Tilly Capital research, April 2016


M&A activity by industry Q1-2016

The Consumer sector led the Pittsburgh regional M&A activity with 34.1 percent of the total deals that closed in Q1-2016. The Industrials sector and the Healthcare sector had the second and third percentage of total transactions closed during the period with 24.4 percent and 22.0 percent, respectively. The Materials, Financials, and Information Technology sectors comprised the remainder of the closed deals for the period with 9.8 percent, 4.9 percent, and 4.9 percent, respectively.


The aggregate deal value of the middle-market transactions with reported values was $513.0 million during Q1-2016. This is a decrease from the total deal value of $1.0 billion during Q4-2015 and a decrease from $985.3 million during Q1-2015.

Pittsburgh regional middle-market M&A activity

Source: S&P Capital IQ and Baker Tilly Capital research, April 2016
Middle-market is defined as transaction values between $5 million and $250 million.

The average transaction size of $64.1 million for the eight deals with reported values in Q1-2016, was a $19.9 million decrease from the average transaction size of the twelve deals with reported values in Q4-2015.

Pittsburgh regional middle-market average transaction size

Source: S&P Capital IQ and Baker Tilly Capital research, April 2016
Middle-market is defined as transaction values between $5 million and $250 million.


Buyers and targets by location

As presented below, the largest number of buyers and seller were located in the Pittsburgh area during the fourth quarter of 2016.

Buyer by location

Target by location

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1Source: BLS.gov (Data is not seasonally adjusted.)

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