The U.S. Federal Reserve has reported that, overall, U.S. industrial production has continued to grow thanks to increased manufacturing and mineral outputs, while utilities production has fallen sharply. IHS Markit’s U.S. Services index showed services output falling to a four-month low but staying in growth territory. Lastly, U.S. soybean exports to China have fallen dramatically from stable levels in August, likely due to the implementation of tariffs from China.
Preliminary data from Pitchbook shows that $13.56 billion was invested across 23 deals last week, the same deal count as the week before but with $3.3 billion more capital. The largest deal was Blackstone Group’s $11 billion public-to-private buyout of the HR management software provider Ultimate Software Group.
Last week, three healthcare companies went public, raising $527.4 million in funding. Gossamer Bio (NAS: GOSS), Harpoon Therapeutics (NAS: HARP) and Alector (NAS: ALEC) all went public on the Nasdaq exchange and raised $276 million, $75.6 million and $175.8 million, respectively.
Annual venture capital investment has hit $100 billion for the first time since the dot-com era, according to Pitchbook. Deal value in VC-led deals reached $130.9 billion, up 57.7% from 2017’s value of $83 billion. The number of financings completed, however, fell to 8,948 from 9,489. The last time venture capital investment topped $100 billion was in 2000, when investment reached $105 billion, according to data from Thomson Reuters. Pitchbook included Altria’s $12.8 billion financing of Juul in its calculation.
US private equity firms completed an estimated 4,828 deals worth a combined $713 billion in 2018, according to data provider Pitchbook. The figures were the highest deal count and second-highest value on record and represent increases of 5.5% and 7.2%, respectively, from 2017 levels. Notable deals during the year included Blackstone’s majority buyout of Thomson Reuters’ Financial & Risk Business (now called Refinitiv), BDT Capital Partners’ and JAB Holdings’ acquisition of Dr. Pepper Snapple, and Veritas Capital’s and Evergreen Coast Capital’s buyout of Athenahealth.
North American M&A value topped $2 trillion for the fourth consecutive year in 2018, with a total value of $2.2 trillion, an increase of 6.9% from 2017, according to Pitchbook. The number of deals completed in 2018 totaled 11,208, down 11.4% from 2017’s 12,647. The median deal size in North America increased 22.4% to $60 million in 2018.
The U.S. job market added over 300,000 jobs while wages grew 3.2% for the last twelve months. The job market has been a shining spot in an economy facing rising rates, tariffs, and slowing global growth. New home sales grew dramatically month-to-month in November but are still slumped 7.7% from a year before. Lastly, the Institute for Supply Management showed that manufacturing growth is expanding at a faster rate in the first month of the new year, thanks to increased production and new orders.
According to preliminary data from Pitchbook, there were 23 deals last week for $10.3 billion of total invested capital. The largest deal was Versum Materials’ $4 billion acquisition of Entegris. Both companies operate in the semiconductor manufacturing space, providing end-to-end materials solutions.
Last week’s lone IPO was New Fortress Energy LLC, which raised $280 million in funding. The company is an integrated gas-to-power company that builds infrastructure for reliable energy supply. Also, German automaker Volkswagen is planning to list its trucking unit, Traton, in April this year. They expect the IPO can raise €5 billion to €6 billion and give the subsidiary a €25 billion valuation. In the U.S., Slack, which is one of the many tech firms planning IPOs this year, announced that it has topped 10 million daily active users on its platform. The announcement lends further credibility to its direct listing plans for the second quarter
Last week, the National Association of Realtors announced that U.S. existing home sells fell dramatically year-over-year in December and that home-price inflation is slowing down to a seven-year low. Also, the Equipment Leasing and Finance Association revealed that American companies are borrowing and leasing slightly less for capital investment purposes than one year ago. Lastly, worldwide credit levels continue to rise to great heights, equivalent to 318% of global output, as of September.