The primary objective of this 2015 study was to review the amount of purchase consideration (PC) allocated to tangible assets, identifiable intangible assets and goodwill. Additionally, contingent consideration (CC), a component of PC recorded by acquirers, was analyzed.
Certain transactions that either did not present intangible assets and/or PC information in a clear, reconcilable format or the general asset and liability segmentation was insufficiently developed were not analyzed.
Overall, the number of transactions with sufficient disclosures decreased from 42% in 2014 to 37% in 2015.
Five of the nine industries studied experienced year-over-year increases in the number of transactions available for the 2015 study. Of these five, healthcare recorded the largest increase in transaction count, up by 56% from 2014.
When measured across all industries, the median percentage of PC allocated to identifiable intangible assets increased slightly, from 28% in 2014 to 31% in 2015.
Similar to the overall results, seven out of nine of the industries showed only a small change—5% or less—in the median amount of PC allocated to identifiable intangible assets compared to 2014.
Telecom and ADG recorded the largest percentage increases of 33% and 10%, respectively. However, Telecom had a small number of transactions, potentially making a comparison not meaningful.
Healthcare recorded the largest percentage decrease of 1%.
The median percentage of PC allocated to goodwill decreased slightly to 38% in 2015 from 39% in 2014. The percentage of PC allocated to goodwill increased when measured on a weighted-average basis to 33% in 2015 from 31% in 2014.
Approximately 65% of the transactions in the 2015 study had PC below $250 million, which is a decrease when compared with 2014. The average transaction size increased from $601 million in 2014 to $1,269 million in 2015, and the median transaction size increased from $73 million to $83 million.
Similar to 2014, approximately 21% of the transactions in the 2015 study had CC in the purchase price. The median fair value of CC in 2015 was $4 million, while the mean was $19 million. In 2014, the median fair value was $3 million, and the mean was $16 million.
CC represented 17% and 21% of PC when measured on the median and mean, respectively. This increased from 2014, where CC represented 15% and 20% of PC when measured on the median and mean, respectively.