The number of Americans applying for unemployment benefits increased 11,000 to 222,000 for the week ended May 12th, according to the Department of Labor. Economists polled by Reuters estimated the weekly claims number to come in at 215,000.
Two large healthcare deals took place last week, with Zoetis buying Abaxis for $2 billion and Eli Lilly acquiring AurKa Pharma for $575 million. In other news, Aurora Cannabis will acquire MedReleaf in the largest marijuana deal ever.
Houzz, a website that helps homebuyers discover design ideas, shop for their home, and find home professionals, hired a new CFO from LinkedIn. Richard Wong, LinkedIn’s former vice president of finance, is set to become Houzz’s first executive, The move signals speculation that Houzz may soon file for an initial public offering. Since founding in 2010, Houzz has raised over $600 million and may be valued at approximately $4 billion.
Middle-market private equity firms completed 619 transactions in the first quarter of 2018, representing $53.6 billion in deal value, according to Pitchbook. Compared to the first quarter of the 2017, completed transactions increased 17%, while deal value declined 40%, signaling a shift toward smaller transactions.
Highlights of last week’s economic news include jobless claims that remained at 48-year lows, slowing consumer credit growth, and a withdrawal from the Iran nuclear deal, which may result in higher oil prices in the near term.
Last week’s mergers and acquisitions activity included two food deals early in the week – Nestlé’s agreement to sell Starbucks-branded consumer packaged goods and Mondelez’s acquisition of Tate’s Bake Shop. Other deals included Recruit Holdings’ acquisition of Glassdoor and Twenty-First Century Fox’s purchase of seven television stations. On the topic of Twenty-First Century Fox, Comcast gained attention last week, as it sought to outbid Disney for Twenty-First Century Fox.
In the largest IPO since Snap’s IPO in March 2017, French insurer Axa took its US arm of holdings public but missed its anticipated target by $1 billion. In other news, the fifth largest asset-based truckload carrier announced plans to go public again after being taken private in 2007.
Private equity activity slowed in the first quarter of 2018, according to Pitchbook. At 1,101 completed transactions in the first quarter, deal volume declined 4.0% from the first quarter of 2017. Surprisingly, deal value, at $88.8 billion, fell 32.8% over the same period. Pitchbook noted an expectation for an uptick in the value in the coming months, as information regarding private transactions is slow to surface.
Mergers and acquisitions (M&A) activity trended down substantially in the first quarter of 2018, according to data from Pitchbook. In North America and Europe, 4,867 M&A transactions were completed, representing approximately $617 billion in value, in the first quarter. Year over year, deal volume was down 18%, and deal value was down 25%. In just North America, there were 2,402 transactions with an estimated value of $323 billion.
Weakness in housing measures highlighted last week’s economic news, as pending home sales barely inched up, and home sales and mortgage applications declined. In other news, the Federal Reserve kept its federal funds rate unchanged.