Deals, deals - and more deals

NEW YORK (CNNMoney.com) -- Mergers and acquisitions are still going strong, with deal activity on track for another record-breaking year.

Deals have been humming along so far this year. On Monday alone, deals across a range of industries were announced.

Credit card and payment processor First Data (Charts) said it was being bought by private equity firm Kohlberg Kravis Roberts for $29 billion. Chicago billionaire Sam Zell said he would buy Tribune (Charts) in a deal that values the company at $13 billion and Xerox (Charts) said it was buying Global Imaging Systems (Charts) for $1.5 billion.

The frenetic start to the second quarter comes on the heels of an active first quarter, when worldwide mergers and acquisitions activity reached $1.1 trillion, up 27 percent from a year ago, according to Thomson Financial.

Aided by low interest rates, dealmakers have been on a tear. Last year, deal activity hit $3.8 trillion worldwide, setting a new record. Quarterly deal activity has now surpassed the trillion dollar level for two straight quarters - the last time that happened was in 2000, Thomson said.

Tom Sowanick, chief investment officer at investment adviser Clearbrook Research, said activity is likely to maintain momentum. "There's just so much liquidity. It makes for a rich environment for deals," he said.

Sowanick expects M&A activity to hit a fresh record this year, driven by private equity. More institutional investors, as well as wealthy individuals, are turning away from the volatility of day-to-day markets and seeking out private equity, which is a long-term investment, he said.

Private equity firms, which buy companies with mostly borrowed money, have been behind some of the biggest deals this year. (Confused by private equity? Watch this video -- 3:38)

In February, KKR and TPG (formerly Texas Pacific Group) said they would pay $32 billion in cash and assume $13 billion in debt for Texas utility TXU Corp. (Charts) Blackstone Group, which recently filed for a $4 billion initial public offering, earlier this year closed on its deal to acquire Equity Office Properties Trust - a deal in which it agreed to pay $23 billion in cash and assume $16 billion of debt.

Private equity firms accounted for 25.8 percent of U.S. activity in the first quarter, according to Thomson. That's down from the fourth quarter of last year when buyout firms accounted for 36.7 percent of U.S. deals, but the fourth quarter was also the busiest quarter ever for deals.

While private equity keeps making waves, there are concerns that once the debt markets turn, and lending restrictions tighten - there could be a sharp downturn in buyouts, and deals overall.

Until that happens though, expect the deals to keep on coming.

A handy private equity cheat sheet