The findings are from the Appleby’s latest Offshore-i, a quarterly report providing data and insight on M&A activity in major offshore centres.
The value of deals involving offshore targets increased 12%, up $3.8bn from the previous quarter, which Appleby said compares to a 6% increase in the worldwide value of deals and “vastly outpaces many of the major financial markets, including the US and Asia”.
Meanwhile, the number of deals involving offshore targets was down by 4% from the previous quarter, and down 34% from the same quarter in 2011. Appleby said this mix of fewer deals but at a larger value is an indication of continuing market consolidation.
Appleby said the Cayman Islands took the “top spot” as the most popular destination for investors doing deals involving offshore targets, completing 104 deals worth a combined value of $19bn. Much of this value was, encapsulated by a number of large transactions, said Appleby, including the “take-private” by Alibaba Group, a global e-commerce group based in China.
The law firm said the financial services sector also continues to dominate deal activity levels involving offshore targets.
The overall deal value growth realised in the first quarter has continued into the second quarter of 2012, attributed in large part to the top eight deals which were valued at US$1bn or more each. Of particular significance were the two leading deals which related to the privatisation of the Alibaba Group, worth a combined value of US$9.4bn.
“This quarter we can observe a certain robustness returning at the larger deal end of the transactional landscape,” said Peter Bubenzer, Appleby’s Bermuda-based group chairman.
“Financial sponsors find themselves sitting on cash that needs to be invested, and corporate balance sheets look strong and ripe for spending on the right deals in the right places.”