Here’s an exciting excerpt from NY Times DealBook - “Verizon's Big Deal Financing Moves Quickly, as Debt Markets Remain Open. Verizon's deal, which included $61 billion in financing, highlights what bankers describe as the continued healthiness of the debt markets.”
The Verizon deal highlights the continued health of the debt markets. About $658 billion worth of investment-grade corporate debt has been issued so far this year, just 3.2% below the 20-year high mark set in 2007, according to the NY Times and data from Thomson Reuters.
It’s a very compelling time for tech M&A. We’re seeing the same dynamics trickle down into our private software company deals. For example, in one recent mandate, we had over 10 private equity bidders putting forward very strong proposals. They even outbid the strategic buyers with excellent synergies. Granted, the seller is a very well-run company, a leader in its market. Importantly, its profits are strong enough to service the proposed debt structure without undermining revenue growth. However, without lots of available debt financing at attractive rates, this scenario with so many qualified bidders all making strong proposals would not have materialized quite so well.