Ireland M&A Review HY 2020

05 August 2020

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Mergermarket and William Fry are pleased to present the Ireland M&A ReviewThis report provides a comprehensive overview of developments in Irish M&A during H1 2020 and offers insight into likely trends in the coming months as the Covid-19 pandemic continues to cast uncertainty for the global M&A market entering H2.

Key findings include:

  • In the face of widespread uncertainty, the Irish economy and dealmaking activity in the country have suffered a blow. Across H1 2020, deal volume and value both fell substantially with just 65 deals worth €2bn recorded, down by 29% and 26% respectively. Though it is noteworthy that this was to be expected in light of the Covid-19 crisis and these figures represent a far less steep decline than in many other countries. Global M&A deal value, for instance, fell by as much as 53% over the same period while volume dropped by 49%.
  • Ireland’s mid-market continues to dominate, as TMT claimed the lion’s share of deals in the first half of the year. Once again, the mid-market (€5m-€250m) was the most active segment in Ireland’s M&A landscape, representing 89% of deals with disclosed deal value in H1 2020. However, in contrast to previous years, there were no deals recorded worth €500m with the largest deal, the sale of Dublin semiconductor innovator Decawave to US-based Qorvo, reaching €363m. This deal helped solidify TMT’s position as the largest sector by both value and volume, representing a strong endorsement of Ireland’s high-tech sector. TMT accounted for 54% of total value across H1, and 34% of value, performing well in the face of the pandemic.
  • Deal activity is expected to rebound in the second half of the year. While the Irish M&A market’s reliance on international investment means that Ireland may be especially vulnerable to any future coronavirus outbreaks, its track record for dealing with, and containing the crisis should allow for investor’s minds to be put somewhat at ease. Even so, 2020 is still likely to represent one of the lowest watermarks in M&A since the global financial crisis more than a decade ago, as it will take some time for dealmaking to return to pre-pandemic levels.

Global dealmakers: North American M&A market update 2020

28 July 2020

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Mergermarket is pleased to present Global dealmakers: North American M&A market update 2020, published in association with Baker Tilly International.
 
Since Covid-19 began sweeping the globe, declines in North American M&A have been swift, with deal totals in the first half of 2020 sinking to some of the lowest in recent memory. Investor sentiment has sunk with it and most participants in our research say they are putting M&A on hold until the Covid-19 crisis is resolved. While most respondents say they will be decreasing investments into North America in the year ahead, there are holdouts who say they will stay the course or even increase deals, aware that the pandemic is only temporary and hopeful that North America will recover strong.
 
This report explores the current challenges shaping the North American M&A market in addition to the main drivers behind cross-border deals and key markets where opportunities can be found.
         
Key highlights include:
 
  • Pandemic shapes M&A intentions: 55% of dealmakers say they are decreasing their M&A in North America due to the spread of Covid-19.
  • Deal drivers: 83% say distress-driven M&A will be the top deal driver in the year ahead, followed by favourable valuations (75%) and private equity buyouts (70%).
  • Private equity in the spotlight: 48% say the level of private equity activity will increase over the next 12 months.
  • November elections: 47% say the upcoming US elections in November will have a negative impact on M&A.

Global Risk In Review 2020

22 July 2020

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Mergermarket is pleased to present our quarterly Risk in Review 2020 report, published in association with Aon’s Transaction Solutions team.

For this report, Aon commissioned Mergermarket to interview global M&A insurers and managing general underwriters to learn their views about the risks and challenges in the year ahead. The coverage includes exclusive data exploring regional, deal size and sectoral variations as well as insights on claims, a potential hardening market and premiums, positions and policies.

Key findings include:

  • Survey respondents noted M&A insurance (R&W, Tax and Contingent/Litigation) was placed for 4,229 deals globally in 2019, representing continued annual growth in dealmakers’ utilization of insurance as a key strategic tool.
  • Outside of North America, which realized the greatest increase in policies underwritten in 2019, 11% of survey respondents saw the most growth in Asia, with the same share selecting Europe as their fastest growing market. More than a quarter (26%) also picked Europe as the market most likely to grow the fastest in 2020.
  • Despite COVID-19’s impact on deal flow in the first half of 2020, respondents remain optimistic regarding the value of M&A insurance to manage risk in the face of economic uncertainty, particularly distressed transactions, and look forward to insurance being a key factor as deal volume begins to rebound.
  • Most respondents (83%) received claims that impacted their deal selection and underwriting approach. Restriction of deal selection was chosen by 47% as the most important consequence following a received claim.
  • 84% of respondents expect to see the most growth in policy issuance in the lower mid-market (deals valued between US$5 million and US$99 million) and the upper mid-market (deals valued between US$100 million and US$999 million).

PR Advisors Global & Regional League Tables

15 July 2020

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  • Globally, Finsbury Hering Schuppener GPG overtook the #1 spot in deal value from Joele Frank Wilkinson Brimmer Katcher, jumping from seventh place in 1H19 with a deal value of USD 86,568M

 

  • Brunswick Group leaped into the top three (#3) from fourth place in 1H19 with USD 75,043M

Global and Regional M&A Report Including League Tables of Legal Advisors

02 July 2020

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Mergermarket, the leading provider of M&A data and intelligence, has released its 1H20 report with league tables. According to the new research, the initial effects of COVID-19 were only beginning to be felt across the global economy at the end of 1Q20. However, its full impact manifested in the second quarter, where deal volume nearly halved from 4,308 deals in 1Q20 to 2,630 in 2Q20 and deal values plummeted from USD 592.6bn in 1Q20 to USD 308.9bn in 2Q20.
 
  • Contrasting 1H20 to 1H19, deal volume fell 32% compared to the previous year (6,938 deals vs. 10,155 deals), and deal values declined 53% year over year (USD 901.6bn compared to USD 1,907.5bn). Such activity levels were most evocative of 2008 and 2009. While the Global Financial Crisis remains the best historical comparison, COVID-19 has generated its own unique brand of mayhem.
  • To see the differences between COVID-19 and the Global Financial Crisis, one need look no further than the second top performing sector of 1H20—Financial Services. Even accounting for a sizable fall in deal count, the Financial Services sector more than doubled its global market share to 17.1%. Six of the largest financial services transactions announced in 1H20 are investing or banking related, including Morgan Stanley’s USD 13bn bid for ETrade Financial, Kuwait Finance House’s USD 9.8bn offer for Ahli United Bank, and Franklin Resources USD 5.4bn bid for Legg Mason. Meanwhile, Aon [NYSE:AON]’s USD 35.6bn plan to merge with Willis Towers Watson [NASDAQ:WLTW] is an example of one the few large transactions that has managed to move forward.
  • Technology, Media and Telecom (TMT) also increased its relative share of global M&A, as businesses became virtual and consumers were driven online. Sectors such as Consumer and Leisure have been impacted, falling a combined 64.3% by value and 66.1% by deal count year of year, and Energy, Mining & Utilities was hit hard (declining 67.6% in value and 33.9% in volume) as commodities reacted negatively when energy demand dried up. Construction was the only sector to turn in a positive number achieving a 5.7% increase in deal value despite a one-third decline deal volume.
 

Global and Regional M&A Report 1H20 Including League Tables of Financial Advisors

02 July 2020

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Mergermarket, the leading provider of M&A data and intelligence, has released its 1H20 report with league tables. According to the new research, the initial effects of COVID-19 were only beginning to be felt across the global economy at the end of 1Q20. However, its full impact manifested in the second quarter, where deal volume nearly halved from 4,308 deals in 1Q20 to 2,630 in 2Q20 and deal values plummeted from USD 592.6bn in 1Q20 to USD 308.9bn in 2Q20.
 
  • Contrasting 1H20 to 1H19, deal volume fell 32% compared to the previous year (6,938 deals vs. 10,155 deals), and deal values declined 53% year over year (USD 901.6bn compared to USD 1,907.5bn). Such activity levels were most evocative of 2008 and 2009. While the Global Financial Crisis remains the best historical comparison, COVID-19 has generated its own unique brand of mayhem.
  • To see the differences between COVID-19 and the Global Financial Crisis, one need look no further than the second top performing sector of 1H20—Financial Services. Even accounting for a sizable fall in deal count, the Financial Services sector more than doubled its global market share to 17.1%. Six of the largest financial services transactions announced in 1H20 are investing or banking related, including Morgan Stanley’s USD 13bn bid for ETrade Financial, Kuwait Finance House’s USD 9.8bn offer for Ahli United Bank, and Franklin Resources USD 5.4bn bid for Legg Mason. Meanwhile, Aon [NYSE:AON]’s USD 35.6bn plan to merge with Willis Towers Watson [NASDAQ:WLTW] is an example of one the few large transactions that has managed to move forward.
  • Technology, Media and Telecom (TMT) also increased its relative share of global M&A, as businesses became virtual and consumers were driven online. Sectors such as Consumer and Leisure have been impacted, falling a combined 64.3% by value and 66.1% by deal count year of year, and Energy, Mining & Utilities was hit hard (declining 67.6% in value and 33.9% in volume) as commodities reacted negatively when energy demand dried up. Construction was the only sector to turn in a positive number achieving a 5.7% increase in deal value despite a one-third decline deal volume.

An opportunity in crisis: Italian M&A and PE activity in 2019–Q1 2020

26 June 2020

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Mergermarket and Unquote are pleased to present An opportunity in crisis: Italian M&A and PE activity in 2019–Q1 2020, published in association with Gatti Pavesi Bianchi. This report provides invaluable insights into M&A and private equity activity in Italy as the COVID-19 crisis takes hold in the region.    

 
Highlights from the report include:
 
  • 2019 in review. While the M&A market in Italy remained active across 2019, there were already signs that investors were taking less risks. The region witnessed an annual decrease in total deal value by 33% to €37.3bn, the weakest total since 2014. 
  • M&A figures for Q1 2020 supressed in the wake of COVID-19. There were 112 deals M&A deals recorded in Q1 2020, 12% fewer than Q1 2019 – making it the weakest quarter in six years. However, at €11.9bn, deal value across the quarter topped the same period in the previous two years, although much of this increase was due to a single deal, Intesa Sanpaolo’s €4.8bn bid for UBI Banca, which is still pending approval by shareholders and regulators.
  • Navigating a challenging environment. Looking forward, a prosperous M&A climate in Italy will somewhat depend on cross-border deals returning to the fore post COVID-19. Italy is an export-oriented economy that has strong trade ties with China. While outbound M&A by China-based buyers has fallen in recent years, there is some indication that Chinese firms will begin to look overseas for deals once again. 

Band Together: Corporate and Cultural Convergence in Life Sciences M&A

24 June 2020

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Mergermarket is pleased to present Band Together: Corporate and Cultural Convergence in Life Sciences M&A, published in association with Mintz.

M&A plays an important role in enabling the life sciences ecosystem. It is one of the main routes by which promising treatments are acquired, nurtured and brought to market. And it is one of the routes by which life sciences companies refresh their portfolios so they can remain relevant to investors. This report takes a deeper look at the current deal drivers and unique challenges dealmakers within the life sciences sector face during integration.

Key findings include:

  • When asked about the rationale for their most recent deal, the top answer among respondents was patent expirations, followed closely by diversifying/improving product portfolio.
  • A high proportion of seller respondents obtained an acquisition price well in excess of their goal. When asked about the price paid, 28% say the price was 10-20% above target, with 16% reporting that that it was up to 10% more.
  • 54% of respondents say the integration process applied in their most recent deal has to date been either somewhat or very successful, while 31% say the integration has been unsuccessful.

Investing in CEE: Inbound M&A report 2019/2020

18 March 2020

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Mergermarket and Mazars are pleased to present Investing in CEE: Inbound M&A report 2019/2020. This report offers an overview of investor activity into the CEE region in 2019, and looks ahead to the challenges and opportunities for the coming months, notably in the context of the ongoing Covid-19 outbreak.
 
Key highlights include:
  • CEE saw 726 M&A deals in 2019 – the same number as in 2018. This included 289 inbound deals from outside of the CEE region, remaining steady at 40% of deals, on par with the past four years. Meanwhile, total public CEE deal value fell 12% to €42.3 billion. However, this figure only includes deals with disclosed values, which means that the total deal value is, in practice, higher.
  • Russia once again leads the way for regional dealmaking, even with sanctions still in place. Deal value remained steady at €21.5 billion across 167 deals – up from 159 the previous year. Four of the top ten deals and three of the top five took place in Russia. In terms of inbound activity, Poland proved to be the leading destination in 2019. The country saw 65 bids, up from 51 in 2018. This was accompanied by a more than twofold increase in deal value, from €1.9 billion to €4.6 billion.
  • CEE’s strong industrials sector continued to attract the most inbound deals at 56. However, these totalled just €1.1 billion, down from €5.5 billion the year before. Energy and utilities remained the top sector for value, with total inbound deal value of just under €7.6 billion, up from €7.4 billion in 2018.
  • Going into 2020, the CEE will face economic headwinds from the global outbreak of Covid-19, as will all regions in the world. However, GDP in CEE was projected to grow at a faster pace than in the G7 or the Eurozone prior to the start of the outbreak, and the region’s strong fundamentals – including its highly educated population, relatively low costs, growing middle-class and relatively stable political environment – should ensure that it is primed for recovery once the crisis passes.

M&A in the face of historic uncertainty

16 June 2020

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Mergermarket is pleased to present M&A in the face of historic uncertainty, published in association with Imprima. With the Covid-19 pandemic throwing the global economy into an unprecedented crisis, both M&A value and volume fell in Q1 2020 – by 39% and 25% respectively – with Q2 projected to record a much steeper decline.

Exploring these trends, Mergermarket, on behalf of Imprima, spoke with six experts from the fields of law, corporate advisory, academia, and technology to share their insights on how the Covid-19 pandemic is impacting dealmaking, and the ways the landscape may continue to develop in the coming months.

Points of discussion include:

  • M&A has witnessed a deep decline, but is this the whole story? Although many deals are being cancelled or put on hold, some M&A processes have managed to proceed, albeit with some terms having to be renegotiated. 
  • Some sectors are better placed than others to resume dealmaking. Resilient sectors are likely to be healthcare and those in the technology space as remote working becomes normalised. Worst affected sectors include the travel and hospitality sectors which rely on in-person consumer spending.
  • The future is uncertain even as lockdown measures begin to ease. The impact of this crisis looks to be long lasting. The way that M&A deals are completed is bound to change for good, whether through the inclusion of clauses to protect against any similar situations, or through the continued use of videoconferencing solutions.

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