Market Spotlight: Financial Regulatory Update

27 February 2014

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Welcome to February’s Venue® Market Spotlight. This month’s edition focuses on financial regulatory updates.

Mergermarket, commissioned by RR Donnelley, interviewed investment bankers based in the US, Europe, and Asia-Pacific to gain insight into their views regarding the ramifications of financial regulations. Respondents discussed how the Volcker Rule, Basel III and Solvency II are impacting M&A decision-making.

Aviation & Aerospace M&A Quarterly Q4 2013

05 March 2014

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In Q4 2013, aviation activity was up while aerospace activity was down compared to the previous quarter, according to the second edition of Aviation & Aerospace M&A Quarterly, published by global consulting firm, ICF SH&E in association with Mergermarket.

Highlights include:

  • The big three Gulf carriers – Emirates, Qatar Airways, and Etihad – further solidified their ambitious expansion plans via massive orders at the Dubai Airshow
  • The aircraft leasing industry witnessed a landmark transaction in the consolidation of AerCap and ILFC
  • Consolidation in the helicopter industry picked up speed
  • Textron makes a major strategic move with the acquisition of Beech Holdings
  • China’s outbound M&A continues unabated, with significant US buys in Q4 2013

This newsletter examines the drivers of M&A activity in the coming months and years, and looks at advances in additive manufacturing, also known as 3-D printing, a disruptive technology poised to fundamentally transform parts of the aerospace supply chain.

Monthly M&A Insider: March 2014

21 March 2014

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The beginning of 2014 finds the M&A climate holistically improving. This past February, the number of global deals increased 7% year-on-year (YoY) to 1,028 deals, while value jumped 24% to US$274.5bn over the same period.

Highlights include:

 

  • Real Estate YoY volume increased by 69% to 22 deals globally
  • While China and Japan saw volume and value figures decline sharply in February after a strong start to the year while Australia saw a slight uptick with bulge bracket deals
  • February 2014 revealed to be a month of large deals in Europe with three of the top transactions totaling US$27.9bn

Opportunity Knocks: Success in Restructuring

16 June 2015

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Picking an approach to transforming or reorganizing a company’s structure can be the difference between a successful turnaround and the loss of tremendous amounts of time, resources, and value. Today, amid macroeconomic uncertainties and the slowdown in the Chinese economy, deciding on a course of action — be it cash management, corporate expansion, overhead optimization, or efforts to enhance revenue – is even more pressing in Asia as corporation and private businesses reorganize their financial and operational structures.
 
In this third annual report on restructuring in the Asia-Pacific region, titled Opportunity Knocks: Success in Restructuring, AlixPartners and Remark analyze current trends and challenges, as well as the options available during a turnaround and their anticipated use in the year ahead.
 
Highlights from Opportunity Knocks: Success in Restructuring include:
 
  • 93% of survey participants anticipate an increase in corporate restructurings in the Asia-Pacific region in the year ahead. This represents a significant increase over expectations from surveys in 2013 (66% of respondents) and 2014 (70%).
  • Only 18% of respondents say they take a proactive approach to restructuring, despite widespread realization that early action can give corporate leaders greater control over the process.
  • Strategies that can be applied to cope with operational and financial changes include mergers and acquisitions (M&A), cash management, overhead optimization, and revenue enhancement. Within each overall strategy, respondents pinpoint particular initiatives they say offer the best chance for a successful restructuring.
  • When using M&A as a restructuring tactic, respondents note that poorly executed integration can have a lasting, negative impact on the future fortunes of a company. Whereas 30% say post-deal processes represent the most challenging aspect of a deal, 90% admit that the most time and resources are dedicated to earlier stages in the transaction. Close to 25% say post-merger integration deserves more attention than it is being given.
  • Generally, respondents say the restructuring profession has yet to establish a foothold in the region comparable to that in North America or Europe. Although regulatory and political developments are paving the way to make it easier to restructure, 57% of respondents say the region is still less mature than markets in the West.

Baltic M&A Monitor

27 March 2014

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Mergermarket is pleased to present the third edition of the Baltic M&A Monitor in association with Raidla Lejins & Norcous. This report provides a detailed look at M&A activity in Estonia, Latvia and Lithuania, along with forecasts for the 12 months ahead.

According to the report, the Baltics saw a four-fold increase in M&A value in the past year, with €1.1bn worth of deals in 2013 compared to €311m in 2012. This was despite no change in the overall volume of deals in the region (51) and a 12% drop in M&A values across Europe as a whole.

Highlights from the report include:

  • The year-on-year growth in Baltic M&A value hinged largely on the €782m investment into AB Ukio Bankas by Lithuanian bank Siauliu Bankas AB, which points to the importance of domestic restructuring among the Baltic regional banks to the wider M&A landscape.
  • The Financial Services and TMT sectors played an important part in boosting recent deal flow, accounting for 60% and 17% respectively of aggregate deal value in 2012-2013. On the other hand, the Energy sector’s share of deal value declined from 57% in the 2008-2011 period to just 3% in 2012-2013.
  • Deal volume in 2013 was also distributed more evenly across the three Baltic states than in previous years. Latvia, which typically trails behind Lithuania and Estonia in terms of M&A volume, is starting to account for a larger share of the region’s M&A activity.

Market Spotlight: North American Outbound M&A

27 March 2014

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Welcome to March’s Venue® Market Spotlight. This month’s edition focuses on North American outbound M&A.

Mergermarket, commissioned by RR Donnelley, interviewed investment bankers from the largest North American markets – US, Mexico, and Canada – to examine what the drivers of outbound deal-making are for these countries. While respondents generally expect North American outbound M&A to increase, the reasons behind it vary by country.

William Fry Irish M&A Annual Review 2013

01 April 2014

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Mergermarket is pleased to present the third edition of the William Fry Irish M&A Annual Review. This report provides a comprehensive overview of developments in the Irish M&A market during 2013, and offers insight into likely trends in the year ahead.

2013 was a year that saw consolidation of the recovery over recent years in the M&A market. Deal volume edged up 3% year-on-year (YoY) to 82 deals, although value dropped 26% to €18.9bn over the same period.

Highlights from the report include:

  • Significantly, deal volume in the >€500m range doubled from 2012 to 2013 thanks to a flurry of inboundstrategic acquisitions. This included the €6.5bn acquisition of Ireland-based Warner Chilcott by US-based pharmaceutical company Actavis– in the year’s largest Irish M&A transaction.
  • Activity was most pronounced in the pharma/medical/biotechtelecomms/media/technology and financial services sectors, all of which saw an influx of foreign buyers targeting Irish firms for their technological capabilities, growth potential and lucrative client bases.
  • Buoyant M&A activity did not extend to private equity. In 2013, buyout value dipped to €251m, the lowest point since 2008, while exits remained languid, with just four deals compared to 2012’s five.

Monthly M&A Insider – June 2015

19 June 2015

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May was relatively quiet on the M&A front this year. Global deal values rose slightly to US$348.1bn, up 14.5% from April’s US$304bn, and 27% from May 2014’s US$274.1bn. Conversely, volume fell to 984 deals, down 8.5% from April’s 1,075 transactions, and 30.9% from May 2014’s 1,425 deals.
 
Highlights from the report include:
 
  • The US hosted the most global M&A transactions, sweeping eight of the top 10 spots, adding up to US$175.6bn, or 50.4% of the month’s total value.
  • Brazil, the most active country by volume, showed a slight rebound in May despite its overall weak economic outlook, with 12 deals worth US$2.1bn.
  • Inbound activity targeting European companies has increased reaching US$16.2bn, a 33.9% increase compared to May 2014.

The right combination: Managing integration for deal success

03 April 2014

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Mergermarket is pleased to present The right combination: Managing integration for deal success, a study of post-deal integration strategies, published in association with EY.

In cooperation with EY, Mergermarket interviewed 200 senior corporate executives involved in the deal integration process. The results provide vital insights into what is driving M&A in the current market, and how the rationale for a deal impacts on the integration strategy.

Findings include:

  • The integration of Sales and Marketing, and Operations are a key post-merger focus, with the survey showing that the integration of these functions is the most important for increasing growth and scale.
  • Four-fifths (84%) of respondents say growth is the main reason for undertaking M&A.
  • Operational experience is regarded as the most important quality for an integration manager, cited by 86% of those surveyed.
  • Companies, on average, spend 14% of deal value on integration. Average deal size over the past 12 months was €256m (US$366m), suggesting that integration costs per deal reach €36m (US$50m).

Steering Successful Growth: Value Capture in M&A Steering Successful Growth: Value Capture in M&A

25 June 2015

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Corporate deal-makers reveal important differences between successful and unsuccessful deals in a recent study developed by Crowe Horwath LLP, Steering Successful Growth: Value Capture in M&A. Crowe commissioned Mergermarket to interview 100 U.S. corporate executives about some of their most recent deals – looking at what the acquiring companies set out to achieve, the processes they used, and whether they deemed the deals successful or not in terms of capturing value.
 
Key findings include:
 
  • The successful transaction professionals succeed in prioritizing resources and effort around highest value-capture initiatives 91 percent while their less successful peers only achieved this 67 percent of the time.
  • Half of successful deal-makers used an integration scorecard compared to only 37 percent of unsuccessful ones.
  • Only 11 percent of successful deals were cross-border, compared with 33 percent of unsuccessful deals. This report will provide insight into the paths taken by successful acquirers and provides in-depth perspective from Crowe on challenges of commercial synergy value capture and over-coming cross-border pitfalls.

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