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PwC: North American Power and Utilities deal value surges

By Rob Starr, Content Manager,

According to the quarterly M&A snapshot – North American Power Deals: Q3 2012, released recently by PwC, North American power and utilities merger & acquisition (M&A) value increased in the third quarter of 2012, driven by one large deal worth $4.2 billion, according to PwC US. The uptick in activity seen in the third quarter is expected to continue through the end of the year as power and utilities companies look to bolster their growth strategies by pursing assets.

“This quarter we saw the highest level of deal activity of transactions worth over $50 million since the third quarter of 2011, as companies look to scale operations to drive revenues,” said Jeremy Fago, PwC’s U.S. power and utilities valuation services leader. “Consistent with our earlier reports, we continue to see increased generation asset activity, both fossil and renewable.”

Among the six deals announced during the third quarter of 2012, the largest deal was in the merchant energy space, where PwC expects to see continuing activity for several reasons including environmental compliance pressures, load growth considerations and the current price of natural gas. Other deals in the third quarter included fossil, wind, solar and hydro generation, retail marketers and developers.

In the third quarter of 2012, there were six announced transactions with values greater than $50 million totaling $4.9 billion, a notable increase in volume compared to the second quarter of 2012, which only saw two announce d transactions totaling $668 million. The increase in deal value was driven by one large deal worth $4.2 billion, which pushed average deal value in the third quarter of 2012 to $826 million, compared to $334 million in the second quarter of 2012. On a year-over-year basis, while deal volume declined, total deal value increased 90 percent from $2.6 billion in the third quarter of 2011.


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