Top-5 M&A Deals This Week (Jun 22)

Most interesting deals this week by size (<$50 million, $50-$100 million, $100-$500 million, $500 million - $1 billion and >$1 billion)

I’ve been off lately and have not updated my “M&A deals of the week” for a couple of weeks. That did not stop the world of M&A though. Activity has increased a little versus a couple of weeks ago, but not by too much. A total of 222 deals closed last week around the world - but some were really interesting. Here are the top-5 from the previous week. One deal per size category: >$1 billion, $0.5-1.0 billion, $100-$500 million, $50-$100 million and <$50 million.

Deal size over $1 billion

I would be remiss if I didn’t mention Nippon Steel’s acquisition of US Steel for $14.9 billion. This marks the end of a truly bruising and highly political takeover process. US Steel has struggled with high costs for years, and Nippon’s offer to takeover the company with a promise of new investment into the firm was first proposed in 2023. But of course, US Steel is considered a “strategic asset” with national security concerns and the politics heated up quickly. President Biden effectively blocked the transaction and US-based bidders dropped out. President Trump managed to approve the deal under strict conditions that leave the US Government with control over the US Steel entity via a “golden share” agreement.

“[The golden share grants] the right to appoint an independent director…and Consent rights of the President of the United States, or his designee, on specific matters” - Reuters

If I had to guess, the US Steel saga is far from over. It may lie dormant for awhile, but with the President now able to appoint someone to the Board and have an effective veto over “certain matters”, it is only a matter of time before the politics heats up once more. It is unclear if Nippon, or the US Government, will come to regret this acquisition in the long-run.

Deal size $500 million to $1 billion

For motorcycle enthusiasts, a major M&A announcement: India based Bajaj Auto will acquire Austria’s KTM for $924 million. KTM is an Austrian motorcycle manufacturer struggling with a financial debt restructuring that was threatening to send the firm into insolvency and liquidation. Production facilities in Austria had already been halted, the company was in the courts trying to get a restructuring plan approved - and the deadline was end of May 2025. Bajaj has stepped in, just in time, with the first 200 million Euro installment as part of a larger court-approved rescue. The remaining funds are now approved and on the way (loans plus convertible bonds), with Bajaj gaining majority control over the company. The deal will build on their longtime partnership with KTM and further expand their presence in high-end performance motorcycles. As a condition of the deal, Austrian jobs will be preserved.

“The most important thing in all decisions is the successful future of KTM and the long-term safeguarding of jobs.” - CEO of KTM

Deal size $100 million to $500 million

In an all Singapore affair, Alliance Energy Services has acquired PEC Energy for $165 million. Alliance Energy is part of Liberty Energy Solutions Ltd, which provides energy engineering solutions and proprietary equipment / products to oil and gas refineries and petrochemical facilities globally. PEC is a Singapore based provider of maintenance and integrated EPC services for the oil and gas, petrochemical, chemical and pharmaceutical industries. The deal will expand Alliance / Liberty’s range of services and customer base, mostly in Asia and Middle East markets. Interestingly, Liberty is owned by Private Equity firm ShawKwei & Partners, which specializes in industrial service companies with revenues between $50-$800 million USD. ShawKwei focuses on acquisitions in the industrials and industrial services sectors with expertise in performance improvement / turnaround situations.

“We are excited to welcome PEC into Liberty Energy…PEC’s strong management team, technical expertise, and reputation for reliability and service excellence align well with our strategy of building a global platform for best-in-class energy solutions.”
- Kyle Shaw, Chair of Liberty Energy

Deal size $50 million to $100 million

There were only 4 identified deals in this size range last week. The most interesting was Colt CZ Group’s acquisition of Steel Stamp Inc for $59.5 million. Colt is based in the Czech Republic, and is a global manufacturer of firearms. They have manufacturing hubs in the their home country as well as the USA, Canada, Sweden, Switzerland and Hungary. Steel Stamp is a US based maker of firearm components and has been a long-term supplier to Colt CZ Group. The deal represents a 5x EBITDA multiple of the company’s firearms business.

“The strategic rationale for the transaction is to achieve vertical integration in selected product categories. With this acquisition, Colt CZ Group gains control of a reputable, high-quality precision machining company, that serves as a key supplier of revolver frames, cylinders, spare parts, and other firearm components for the commercial market,” - Radek Musil, CEO of Colt CZ Group

Deal size under $50 million

We remain in the wider defense space - lots of M&A action going on - for the “under $50 million” category this week. UK based Gooch & Housego, a manufacturer of photonics components and systems, acquired US based Global Photonics for $17.5 million. Global Photonics is a manufacturer of optical systems military land applications, as well as for aerospace and industrial sectors. The deal extends Gooch & Housego’s presence as a supplier to the US defense sector, as well as builds their US based manufacturing presence.

I think that defense sector M&A has been heating and am fully expecting more deals to come.