Cayman remains offshore M&A leader

The Cayman Islands remained the most popular jurisdiction for mergers and acquisitions in the fourth quarter of 2013, with a 6 percent increase in the number of deals and a 16 percent jump in the total deal value over the previous quarter, according to law and fiduciary firm Appleby. 

Appleby’s Offshore-I report, which tracks M&A activity in major offshore centers, noted considerable quarterly gains across jurisdictions in the number of deals, their cumulative value and average deal size. 

“Cayman is starting to see heightened deal activity in the M&A space across all sectors, particularly oil and gas and financial services,” said Simon Raftopoulos, a Cayman-based corporate partner at Appleby. “Generally, there was more confidence in the funds market, contributing to a strong 2013 and active fourth quarter.” 

During 2013, Cayman companies dominated offshore M&A activity as the target for most deals in three of the four quarters. In the fourth quarter, Cayman targets represented more than a quarter of the transactions and a third of the total deal value. 

In the last quarter, the Cayman Islands saw 168 deals with a combined worth of $15.6 billion, compared to 158 deals worth $13.4 billion in the previous quarter. When compared to the same quarter a year ago, the volume levels remain broadly consistent, but value is more than $4 billion higher than during the same period in 2012. 

In the quarter’s largest offshore transaction, worth $2.4 billion, Cayman-incorporated telecommunications service provider HKT acquired Bermuda-based telecoms group CSL New World Mobility. The quarter’s only other $2 billion-plus deal also involved a Cayman entity, the takeover of Cayman-based Coastal Energy, an oil exploration business, for $2.2 billion.  

Bermuda experienced unusually high deal activity as an offshore target and more than doubled the value of transactions involving Bermudan entities, almost equaling Cayman in terms of deal value. 

For the year, offshore companies have been busy and were involved in transactions across a wide range of sectors and geographies, Appleby said. 

Improving equity capital markets, more IPO activity and a growing frequency of deals in the $1 billion-plus range were the notable features of 2013, the law firm said. The cumulative 12-month deal value of $151 billion of 2013 was surpassed only three times during the past decade. 

“While the final quarter of the year is typically the busiest, every one of the principal indicators has progressively improved,” said Cameron Adderley, partner and global head of Corporate and Commercial. “Indeed, the global M&A environment is fragile and to an extent lacks depth, but we can’t help but view these year-end numbers as positive.” 

In the fourth quarter, offshore markets ranked sixth among world regions for deal volume, fifth for deal value and third for average deal size. Only North America and South and Central America came in with a higher deal average, the report showed. 

Comments are closed.