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Utilities

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Fundamentals

Size Analysis: During the last quarter of 2023 we saw a slight increase on the number of public companies reaching a Market Capitalization of 3.6 billion. Specifically, there are now 26 more public companies compared to the previous quarter which are contributing to the Market Cap.  Although a higher number of transactions was reported, the transaction value decrease to 90 billion compared to 122 billion on Q32023.

Public Market Dynamics: The largest companies had a drop on their year-over-year returns however the industry's performance improved over the quarter with a notable year-over-year increase on the bottom 20 companies. Both debt-to-equity ratio and interest expense per revenue ratio have been increasing since the las four periods. Overall revenues increased during the quarter.

Transaction Trends: In Q4 2023, the transaction landscape demonstrated a persistence of the preceding trend with a total of 556 transactions, a slight reduction from Q2 2023. The aggregate value of these transactions saw a continued descent throughout recent quarters. The Power and Electricity sector remained the most active in terms of transaction volume. Public offerings saw a spike, overshadowing private placements, with the former experiencing a notable increase from the previous quarter, while the latter witnessed a downturn. This shift points towards a growing preference for public capital markets over private funding avenues during the period.

Dispersion Insights: M&A transactions totaled 255 with a cumulative value of $23.131 billion. Private placements amounted to 118 with notable ventures and growth transactions. Public offerings numbered 173, with a large proportion being public offerings and the remainder shelf registrations. Asia has risen as a dominant force in revenue contribution, with significant M&A activities, followed by Europe. In North America, public offerings and private placements have seen the highest numbers compared to other regions.

Methodology

We screened CapitalIQ using its industry classification. Transactions were filtered by announced date within the last 3 years. Companies were filtered by having a public company type. The main industry selected was "Utilities". CapitalIQ sector "Software and Services" was used to screen the database. CapitalIQ subsectors "Electric Utilities", and "Independent Power and Renewable Electricity Producers" were used to determine our "Power & Electricity" and the rest to was included into our "Gas, Water & Multi-Utilities" category. Our sectors were defined by the CapitalIQ primary industry classification.

THIS REPORT IS NOT TO BE USED OR CONSIDERED UNDER ANY CIRCUMSTANCE BY ANYONE AS INVESTMENT ADVICE

This research report is for informational and discussion purposes only. Information presented here is not investment advice of any kind to any person and does not constitute a recommendation as to the purchase or sale of any interests or as to any other course of action. General, financial, and statistical information concerning the details of this report and related industry are from sources Spaulding Financial believes to be reliable.

Spaulding Financial has accurately reflected such information in this research report; however, Spaulding Financial makes no representation as to the sources’ accuracy or completeness and has accepted this information without further verification. Neither all nor any part of the content of this report may be conveyed to the public through advertising, public relations, news, sales, mail, direct transmittal, or other media without the prior written consent of Spaulding Financial. Spaulding Financial ’s research is as of the date reported herein.

Spaulding Financial has no affiliation with any of the companies comprising the industry used as a basis for research in this report, nor does Spaulding Financial hold any investments in the companies listed herein. The content of this report may be used, in part, as a basis for any work that Spaulding Financial performs for you in the future at the sole discretion of Spaulding Financial. All data is from Capital IQ database.

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