Thursday, September 9, 2021

As you might have already heard, later this month Calcbench will be hosting a webinar on the current state of goodwill on the corporate balance sheet — including a look at how goodwill assets figure into the value of M&A deals.

So in preparation for that webinar, we’ve been analyzing M&A deals overall. Some of the numbers we’ve found are so astonishing, we just had to share them here right away.

What have we found so far?

  • Today’s S&P 500 firms have made more than 3,000 acquisitions since 2010, according to the purchase-price allocation filings captured in our databases.
  • Those 3,000+ deals had a total dollar volume of roughly $5.4 trillion. Even more interesting: 50 firms accounted for 54.5 percent of that total dollar volume over the last decade.
  • When you examine those 50 firms specifically, they made a total of 500 acquisitions over the prior decade — $2.943 trillion worth, of that $5.4 trillion total.

So right away, if you’re an investment banker or capital markets adviser looking to court the big fish, those 50 firms are the biggest. Our databases can empirically demonstrate who those firms are.

We also delved deeper into those 500 deals. Within that $2.943 trillion…

  • $27.19 billion was reported as “indefinite intangible assets,” such as trademarks or perpetual franchise rights.
  • $703 billion was reported as “definite-lived intangible assets,” which can include copyrights, patents, or franchise rights with fixed periods.
  • $1.27 trillion was reported as goodwill, which can include… um, well, anything else that doesn’t have a fixed expiration date or is tied to a specific piece of intellectual property.

Now you see why we want to host a webinar on current issues in goodwill. Because it accounts for a lot of value in M&A deals.

To demonstrate that point, we leave you with Figure 1, below. This shows the percentage of total M&A value that was reported as goodwill, from 2010 through 2020.

That’s a lotta goodwill! We look forward to our webinar discussion on Sept. 23. 

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