M&A Deal of the Year

M&A finally found its rhythm again this year, with a 28% increase in deal value and a 13% increase in deal count through Q3’24 as compared to the same period in 2023.

While PE funds snapped up a large amount of deals - something we will cover for our buyout of the year - strategics had some large deals as well, accounting for ~2/3 of deals through Q3’24.

There were also a solid number of large deals, with 58 deals exceeding $5 billion in estimated value.

With the stage set, I hope you can see that we had our work cut out for us for what deal to pick for M&A Deal of the Year.

A friendly reminder - size isn’t everything. Some deals have great personalities or tried really hard to make it this year; however, this isn’t intramural sports where everyone can be a winner just by showing up. We had to think about what truly the best deal was. Do you give into the winners curse and give it to the firm that paid the most? Do you give it to the deal with the best strategic rationale? Do you give it to someone who you hope sponsors your newsletter in 2025? Do you give it to a deal you had a friend work on? So many factors to consider!

Ultimately, after much deliberation, one deal stood out among the rest… because how often do you see a $36 billion acquisition in the snack food aisle?

M&A Deal of the Year: Mars Acquires Kellanova 🏆

See our full coverage here.

The Deal at a Glance

Mars, the maker of M&M’s and Snickers, agreed to acquire Kellanova—the brand behind Pringles, Cheez-Its, and Pop-Tarts—for $83.50 per share in cash. This represented a 44% premium to Kellanova’s 30-day unaffected VWAP and implied a valuation of ~16.4x TEV/LTM EBITDA.

Mars is a private company and Kellanova is receiving all cash, so there is no investor presentation for me to leverage about how many synergies this will generate or the shareholder value it will create, beyond cash in the pockets of the Kellanvoa shareholders. That being said, Mars has six individuals on the Forbes billionaires list, so it is clear they have some idea what they are doing.

Why It Won

The scale and strategic rationale behind this deal made it a clear winner. Combining two of the world’s largest snack brands under one roof is a game-changer for the industry.

The transaction is expected to close in the first half of 2025, so we’ll keep you updated on any developments. In the meantime, here’s to the deal that takes the cake—or, in this case, the snacks.

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Buyout of the Year

It was a busy year in the world of PE buyouts, partially driven by significant fundraising in 2023 (~$600 billion of capital raised). 2024 saw a slight dip in fundraising, but ~$500 billion was still raised, so nothing to sneeze at.

While sponsor deals only accounted for ~1/3 of all transactions by number, they accounted for ~42% by value, so it is clear that funds were slinging some large deals in 2024.

LBO of the Year: Blackstone Acquires Jersey Mike’s🏆

Among all the LBOs, the deal that stood out was Blackstone’s $8 billion acquisition of Jersey Mike’s (see our full coverage here).

While scale is a meaningful factor for deal consideration, one of the more interesting things here is the comparison with last year’s Buyout of the Year (Roark Acquiring Subway).

Roark paid $9.6 billion for Subway. Certainly if you are willing to pay $8 billion for a company with $3 billion in revenue (Jersey Mike’s), you would be willing to pay ~$10 billion for a company with ~$20.5 billion in revenue (Subway), so why didn’t Blackstone look at Subway instead?

Well, we don’t know what happened last year, but we can look at a key difference between Subway and Jersey Mikes - growth. Jersey Mikes has sales growth of ~25% and unit growth of ~12% vs. Subway’s meager ~7% and ~2%, respectively.

So given the long-term prospects, it seems like Blackstone struck a great deal here. It’s like they got into Subway a few years before it matured, so assuming they can hit even a fraction of the anticipated growth targets, then this should be an easy win for the fund.

IPO of the Year

The IPO market finally showed signs of life in 2024, with 225 companies going public on U.S. stock exchanges—marking a ~46% increase from 2023. While the broader recovery in IPO activity was notable, one company stole the spotlight:

IPO of the Year: Reddit 🏆

From r/F*cked to r/Legendary

Reddit went public on March 21, 2024, debuting at $34 per share. By the end of its first trading day, shares had surged to $46. But that was just the beginning. As of 12/31/24, Reddit’s stock was trading at ~$180 per share, up 422% from its IPO price.

It’s an ironic twist for a company that faced widespread skepticism before going public, with concerns that its notoriously unpredictable user base might tank its IPO. Instead, Reddit’s retail investors, famed for meme stock rallies, turned the IPO into a legend almost overnight.

Interestingly, while Reddit was one of the best performing IPO’s, it wasn’t even in the top 5 of capital raised. The largest IPO of the year was Lineage, which raised $5.1 billion of capital in its US IPO.

The only IPO that has outperformed Reddit in 2024 is NANO Nuclear Energy, which went public at $4 per share and jumped up to ~$25 per share (by year-end). Given the regulatory environment in nuclear energy, I probably wouldn’t go putting my life savings into this one.

All in all, Reddit will be an interesting story because of the users of the platform. Afterall, these are guys who have pumped meme stocks relentlessly, so even if Reddit has a bad quarter, it is impossible to predict what will happen to the share price.

If you’re holding Reddit, here’s hoping you can lock in some long-term capital gains (LTCG) by Q1’25. Until then, the Reddit IPO remains one for the books, proof that sometimes, diamond hands prevail.

Honorable Mentions

We obviously can’t cover every deal, so if you are reading this and you worked really hard on a deal that didn’t get mentioned - we appreciate the shareholder value you delivered at the expense of your sleep schedule. Included in our list of honorable mentions are some deals that we covered throughout the year.

If you are interested in those perspectives, feel free to take a look back on what happened this year in finance (Buysiders wrapped is still a WIP).

M&A Deals 

1. CapitalOne acquires Discover Financial for $35 billion

2. ConocoPhillips acquires Marathon Oil for $22 billion

3. Home Depot acquires SRS Distribution for $18 billion

4. Verizon acquires Frontier Communications for $20 billion

5. BlackRock acquires HPS for $12 billion

6. Siemens acquires Altair Engineering for $10 billion

7. Amcor acquires Berry for $8.4 billion

8. Waste Management acquires Stericycle for $7.2 billion

9. Rio Tinto acquires Arcadium Lithium for $6.7 billion

10. Consol Energy and Arch Resources combine in $5 billion merger of equals

11. Northern Star acquires De Grey for $3.3 billion

12. Peabody Energy acquires AngloAmerican’s Australian coal mines for $2.7 billion

13. Cliffs acquires Stelco for $2.5 billion

14. AngloGold Ashanti acquires Centamin for $2.5 billion

15. Luxottica buys Supreme for $1.5 billion

16. Pepsi acquires Siete Foods for $1.2 billion

17. Keurig Dr. Pepper acquires Ghost for ~$1 billion

18. UberEats acquires Foodpanda for $950 million 

19. Canyon Partners sells ~20% to Dai-ichi Life Holdings for $225 million

Buyouts

1. BlackRock acquires Preqin for ~$3 billion

2. KKR teams up with T Mobile to acquire Metronet

3. CVC acquires Hargreaves Lansdown for £5.4 billion

4. TPG Rise and GIC acquire Techem for €6.7 billion 

5. Butterfly Equity acquires Duckhorn Wines for $2 billion

IPOs

1. Lineage raises $5.1 billion

2. Viking Holdings raises $1.5 billion

3. Carlyle backed StandardAero raises $1.5 billion

4. Wilson tennis owner Amer Sports raises $1.4 billion

5. UL Solutions raises $1.1 billion

Other Top Moments

1. Byju’s CEO quotes Invictus in his shareholder letter

2. BHP makes an unsolicited £31.6 billion bid for AngloAmerican

3. LVMH invests in Moncler’s parent company

4. General Atlantic leads $825 million investment into Vuori

5. Japan sees a rare activism campaign 

6. Mondelez attempts to take over Hershey’s with a $40 billion bid