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Strong Deal Activity Generates Increase in North American Power & Utilities M&A Volume in Fourth Quarter and Full Year 2013, According to PwC US
Corporate deals from strategic investors drive deal value



January 28, 2014

Merger and acquisition (M&A) activity in the North American power and utilities industry increased in the fourth quarter of 2013 on both a year-over-year and sequential quarter basis as companies continued reshuffling portfolios with a focus on their core businesses and strategic opportunities. PwC's US quarterly deals snapshot North American Power & Utilities Deals: Q4 2013 shows an increase in deal activity driving overall deal volume and value in the fourth quarter and full year 2013.

There were 14 power and utilities transactions greater than $50 million in the fourth quarter of 2013, compared to 12 deals in the previous quarter and 13 during the fourth quarter of 2012. Bolstered by two large corporate deals worth nearly $7.4 billion, fourth quarter deal value reached $10.3 billion, more than doubling the deal values of third quarter 2013 and fourth quarter 2012.

"Closing out the year with such a high level of activity is a positive sign for 2014 deal activity. Investors continue to be attracted to assets that generate strong yields, and combined with cash on the sidelines, sellers are seeing this as a good time to bring assets to market," said Jeremy Fago, PwC's U.S. power & utilities deals leader. "We're also seeing increased activity around assets in regions of tightening supply and demand dynamics, as well as those fitting the YieldCo investment profile."

Strategic investors accounted for 93 percent of deals greater than $50 million announced during the fourth quarter, compared to 72 percent in the third quarter, with financial investor activity carrying out the remaining seven percent of deals. "Private equity players have been focusing on regions with tightening supply, specifically Texas, for opportunities in the generation side of the business and to expand their power and utilities portfolio," added Rob McCeney, PwC US energy & infrastructure deals partner. "The markets also remain interested in the outcome of hybrid merchant generation businesses, where there remains the potential for additional assets to come to market."

Six alternative power deals in the fourth quarter marked a high for the year. While these transactions had smaller deal values, they showed there is an interest in alternative deals, especially wind related transactions.

For more information on PwC's Power and Utilities, and Deals practice, visit www.pwc.com/us/utilities and www.pwc.com/us/deals

About the PwC Power and Utilities Practice

PwC provides assurance, tax and advisory services to the power and utilities industry. Using deep industry experience, PwC helps top power and utilities companies gain operating efficiencies across the business value chain, from fiscal integrity and regulatory issues to increased customer service and talent management.

About PwC US

PwC US helps organizations and individuals create the value they're looking for. We're a member of the PwC network of firms in 157 countries with more than 184,000 people. We're committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/US. Gain customized access to our insights by downloading our thought leadership app: PwC's 365' Advancing business thinking every day.

Learn more about PwC by following us online: @PwC_LLP, YouTube, LinkedIn, Facebook and Google+

© 2014 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC US refers to the US member firm, and PwC may refer to either the PwC network of firms or the US member firm. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

For more information :

Organization:
PwC US
www.pwc.com/us


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