In a year marked by uncertainty and smaller deals, M&A activity across Latin America in 2017 saw a marginal 3.11% year­on­year increase in the number of transactions at 2,124, while the total reported values of M&A operations fell 22.2% to US$101bn with 931 values disclosed for deals.

In the fourth quarter alone, there were 538 transactions in the region, according to data from research firm Transactional Track Record (TTR), where disclosed deal values in 256 of them totaled US$30.4bn. This represents an 8.5% increase in the number of transactions over 4Q16, while the total value fell 41.5% in the same comparison ­ suggesting the annual trend of smaller deals was more pronounced in the final quarter of the year.

Equity deals down but VC up

Private equity deals diminished in 2017, as TTR noted there were 33 private equity operations last year, where 13 of them reported a total of US$1.45bn in capital raised through the transactions. This reflects a 33% decline in the number of private equity deals over 2016 and a 48% drop in the reported capital generated in the deals.

Bucking the trend, venture capital deals in 2017 showed a healthy expansion. TTR reported 59 VC deals last year, up 23% from 2016, while the total disclosed amounts for 33 of those operations amounted to US$273mn, a 48% year­on­year hike.

Country activity rankings

In terms of the number of operations in 2017, Brazil led TTR's ranking of the most active countries in the region with 1,095 operations (up 6%), and an increase of 7% in the capital mobilized in year­on­year terms (US$61.0bn). It was followed by Mexico, with 302 operations (nearly stable) but a 40% decrease in disclosed deal value with respect to 2016 (US$18.3bn).

Chile was next in the ranking, with 242 transactions (an increase of 11%) and a decrease of 9% in mobilized capital (US$12.8bn). Argentina, on the other hand, recorded 217 deals (up 5%), with a drop of 70% in mobilized capital (US$5.3bn).

Meanwhile, Colombia had 168 operations in 2017, down 1%, while the disclosed deal values fell 86% compared to the same period of 2016 (US$3.4bn). Peru ranked last with 130 transactions (down 13%), despite seeing a 10% increase in its capital mobilized compared to the previous year (US$6.4bn).

Cross­border play

Latin American firms showed particularly strong outbound interest in the fourth quarter of 2017, especially towards Europe and North America, where eight and five operations were carried out, respectively. Meanwhile, the majority of inbound deals to Latin America came from North America, with 63 operations, followed by Europe (50) and Asia (10).

TTR's featured transaction

Transactional Track Record selected IEnova's acquisition of 50% of Ductos y Energéticos del Norte de Pemex as its featured operation in 4Q17.

DLA Piper Gallástegui and Lozano Mexico offered consultancy for the operation, valued at US$231mn, where legal counsel was provided by Mijares, Angoitia, Cortés and Fuentes. Grupo Financiero BBVA Bancomer handled the financial operations for the deal.

Source: Business News Americas / BN Americas - Chile