Q3 M&A Market Roundup

This article has been updated to reflect the latest data from Matterhorn.

M&A deal activity held strong during Q3, with 76 deals announced, representing $372 billion in activity. This represents a similar level of activity compared to Q2 2021, but a far cry from the blistering pace of Q3 2020, as the economy reopened immediately following the 2020 lockdowns. Matterhorn’s M&A database tracks publicly-announced deals over $25 million in value, harnessing both AI and attorneys to digest the granular deal points of each transaction to allow for comparisons across industries, specific deal terms, and both legal and financial advisors.

We have ranked firms into a “league table” of the top 5 firms based on the cumulative valuation of deals announced during the quarter. When two or more firms are involved in a deal, the dollar value is reflected in each of their totals, (e.g. Kirkland and Latham get credit for electric car company Polestar’s going public SPAC deal).   

Kirkland tops the league table this quarter, advising on 17 of the 76 deals closed during the quarter. Whether advising the acquirer or target company, Kirkland appeared in the deal documents for 22% of all deals announced, valued at $88.5 billion. Kirkland’s larger deals pushed it past Latham, despite the latter firm’s 18 closings in Q3, namely Zoom’s $15 billion acquisition of Five9

Propelled by Canadian Pacific Railway’s $31 billion acquisition of Kansas City Southern, Wachtell rounded out the top three. Focusing on fewer large deals, Wachtell’s attorneys had a hand in 9% of deals announced during the quarter, which account for $65 billion. Weil, Gotshal & Manges and Sullivan & Cromwell trailed the three leaders this quarter, with $55 billion in deal flow each. Weil was catapulted into the top 5 by advising Lionheart Acquisition Corporation on its $32.6 billion SPAC acquisition of MSP Recovery, which was the largest announced deal of the quarter. Sullivan focused on 5 large deals, most notably sitting across from Wachtell as it advised Canadian Pacific Railway. 

Certain industries were in higher demand than others this quarter as target companies in business services accounted for 26% of all deals announced, followed by TMT deals, which made up 17%. Along with Financial services, these top three industries accounted for a majority of all M&A transactions closed during the period.  

Historically, deal volume accelerates in the 4th quarter, as transactions push to close before year end. It remains to be seen whether Q4 2021 will match the surge of Q4 2020, when 131 deals closed before the second wave of the pandemic struck.