Shaping The Future: Trends In Digital Media And Frontier Technologies M&A

18 October 2016

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Growing Together: Collaboration Between Regional and Community Banks and Fintech

24 October 2016

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Banks are increasingly turning to fintech to satisfy customer expectations that banking services will be delivered on technology platforms such as phones and tablets. In order to better understand the dynamics between fintech providers and regional and community banks, Manatt, Phelps & Phillips, LLP (in partnership with financial intelligence firm Mergermarket) conducted a survey of C-level executives from the two groups. The results reveal high hopes for the future of collaboration between the two.
 
Banks see fintech as a way to enhance mobile capabilities, lower capital and operating costs and decrease technology expenditures. Fintech firms see working with banks as an opportunity to gain market credibility and access to the clients of midsized and smaller banks. Senior executives from private equity firms, venture capital funds and investment banks were also surveyed, and they expressed optimism about the potential for bank-fintech partnerships and acquisitions.
 
The survey findings are highlighted in the report “Growing Together: Collaboration Between Regional and Community Banks and Fintech.”
 
Four key takeaways that are useful to everyone in the banking and fintech sectors when approaching the challenges that come with collaboration include:
 
  • Banks are on board with fintech. At 81%, the overwhelming majority of regional and community banks are currently collaborating with fintechs. In addition, 86% of regional and community bank respondents said that working with fintech companies is “absolutely essential” or “very important” for their institution’s success.
  • Lower costs + a better brand = a win-win. For regional and community banks, enhanced mobile capabilities and lower capital and operating costs were highlighted as the benefits of collaborating with fintech companies. Fintechs named market credibility and access to customers in regional markets as the main benefits to partnering with banks.
  • Data security remains a challenge. Both banks and fintech companies are highly sensitive to the ways in which data is shared and secured. This means extra attention must be paid to cybersecurity when the two sides collaborate—especially given the cultural mismatch that can exist between them. Despite the optimism among banks for collaboration, preparedness is a large concern. Almost half of regional and community bank respondents said they are just “somewhat prepared” or even “somewhat unprepared” for this kind of partnership.
  • Regulatory concerns remain paramount. For banks and fintech firms, structuring relationships that are regulatory compliant, including, if required, prior regulatory approval, is critical to ensuring success and the opportunity to change the way financial services are ultimately delivered.

Dealmakers: Mid-market M&A in Asia-Pacific 2016

26 October 2016

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In the midst of economic uncertainty and volatility, dealmakers are taking a more cautious stance in valuations and dealmaking.
 
As a result of this, the Asia-Pacific deal market has seen fewer headline-grabbing megadeals and more deals in the mid-market (deals valued between US$10m and US$250m).
 
YTD 2016, mid-market deals make up 58% of Asia-Pacific deal volume and 22% of value, and have consistently contributed to more than half the deal count since 2011. This compares to global totals of 32% by volume and 13% by value.
 
Baker Tilly International’s exclusive thought leadership publication Dealmakers: Mid-market M&A in Asia-Pacific 2016, produced in collaboration with M&A intelligence provider Mergermarket, analyses the trends and opportunities shaping the mid-market space in Asia-Pacific. The report examines individual markets and the drivers of deal activity, looking ahead to what the rest of 2016 and early 2017 will hold.
 
Key highlights from Dealmakers: Mid-market M&A in Asia-Pacific 2016:
 
 
  • Asia-Pacific mid-market M&A has grown its share of the world’s mid-market total activity by 11% over the last five years, from 28% in 2011 to 39% in 2015.
  • In 2015, the Asia-Pacific mid-market saw 2,405 deals worth US$163.9bn completed, registering an 85.4% increase in value and a 71.9% increase in volume as compared to 2011. Activity in YTD 2016 is following a similar trend, having seen 1,147 mid-market deals worth US$78.5bn.
  • Sectors driving Asia-Pacific mid-market M&A from 2011 to YTD 2016 include industrials and chemicals (22% of total deal volume); technology, media and telecommunications (17% of total deal volume); and consumer (11% of deal total volume).
  • In 2015, Asia-Pacific posted 763 cross-border mid-market deals worth US$52.6bn, accounting for 32% of total mid-market volume and 32% of value in the region. YTD 2016, the region has seen 364 cross-border mid-market deals worth US$25.8bn, or 32% in volume terms and 33% by value.

The Growth Agenda: M&A in Europe, the Middle East and Africa 2016

27 October 2016

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Despite a slowdown in global M&A, deal pipelines for the EMEA region have remained active in 2016. Activity in Europe has decelerated in both value and volume following the UK’s Brexit referendum, leading to more cautious dealmakers. However, deals like SoftBank Group’s US$30.2bn acquisition of the UK’s ARM Holdings show signs of renewed confidence in the region. Also, the mid-market space, particularly within the industrial & chemicals and consumer sectors, is becoming dominant across regions such as Benelux, Italy, and France. In contrast to Europe, deal values in the Middle East and Africa rose, although overall volume decreased. This was due to big-ticket deals worth over US$1bn, coming mostly from Israel, South Africa and UAE.
 
In order to further explore in-depth M&A trends within Europe, the Middle East, and Africa, Donnelley Financial Solutions in collaboration with Mergermarket is pleased to present the first edition of The Growth Agenda: M&A in Europe, the Middle East and Africa 2016.
 
Key findings of this report include:
 
 
  • Overall deal volume in Europe was 13% lower in the first nine months of 2016 (4,336 deals), while deal values decreased by 16% (US$501.5bn in total) when compared to last year.
  • Deal values in the Middle East and Africa (MEA) spiked 125% to US$59.5bn in the first nine months of 2016 when compared to the same period in 2015, despite a 30% slowdown in volume.
  • While the US and the UK were the most active buyers in the MEA region, Germany and China are gaining momentum, with China alone accounting for one-third of total deal values in the region.

Aviation and Aerospace M&A Quarterly – Q3 2016

01 November 2016

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ICF (formerly ICF SH&E) is pleased to present the 13th edition of Aviation and Aerospace M&A Quarterly, published in association with Mergermarket. This publication highlights activity and trends in aircraft, airlines, aerospace, airport and tourism M&A in Q3 2016.
 
Key points from this report include:
 
  • General Electric demonstrated its confidence in the additive manufacturing business with the acquisition of two 3D printing firms – Arcam and SLM Solutions – for a combined value of US$1.4bn.
  • Rolls-Royce agreed to acquire 53.1% of Spanish aircraft engine maker ITP for US$795m.
  • Qatar Airways upped its stake in IAG to 20.01%, acquired 49% of Italy’s Meridiana and agreed to take a 10% stake in LATAM Airlines Group for US$613.
  • North American firms were the top targets in Q3 of 2016, with 12 companies being acquired.

Into the unknown: European M&A Outlook 2016

02 November 2016

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Mergermarket is pleased to present the fourth edition of the European M&A Outlook, published in association with CMS.
 
Our survey provides a unique contrast of the expectations of European M&A pre- and post-Brexit, as corporates and private equity firms wrestle with its consequences for their businesses and dealmaking prospects.
 
Key findings include:
 
  • Brexit hits expectations. Two-thirds of respondents believe that European M&A will fall when asked in the aftermath of the Brexit vote, compared with just 18% in our survey earlier in the year. Dealmakers are wary of the uncertainty, which could potentially pause activity both in the UK and beyond as companies wait for the dust to settle.
  • Bargain hunters. An upside of the Brexit vote for buyers is its effect on the price of assets. Post-Brexit, 54% say that undervalued targets will be one of the greatest buy-side drivers, compared with 39% before the vote. Among corporates and private equity firms considering acquisitions, favourable prices are seen as a key motivator by almost nine in ten.
  • Cross-border drive. While European dealmakers may have hit the brakes, the sentiment for international buyers remains strong. Almost four-fifths anticipate more cross-border M&A into Europe next year, while 61% think the value of these deals will increase. Buyers from North America and China in particular will look to snap up assets to fuel overseas growth.

Market Spotlight: US Election

07 November 2016

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The US presidential race has spurred a great deal of speculation about the new administration’s impact on the domestic economy and dealmaking. One thing that seems certain is that regulations and rules championed by a new administration will cause shifts in the deal landscape. Changes in compliance requirements imposed on the financial sector could cause further momentum toward consolidation among banks, for instance. Trade has also been a hot-button issue, and any amendments to US agreements with other countries are likely to have a significant effect on outbound deals.
 
In order to find out how the results of the election will influence deal activity, Donnelley Financial Solutions commissioned Mergermarket to interview industry dealmakers on their views of how inbound and outbound M&A activity may change, select sectors that will be most impacted, and forecast overall M&A deal flow for 2017.
 
According to the survey, 44% of respondents believe that strong economic growth will drive M&A for 2017. Many participants, however, point to high valuations (44%) and unfavorable regulatory changes (40%) as risk factors to watch for in the coming year.

Powering the flow of global capital: Capital markets issuer insights

10 November 2016

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What is driving today’s global capital marketplace? This is the question we sought to answer in our survey of more than 200 institutional investors, banks, financial sponsors, broker-dealers, sovereign institutions, corporate and financial institution issuers and investor relations executives, conducted on behalf of Deutsche Bank Global Securities Services in the summer of 2016. The results highlight three trends focusing on financial regulations, new technology and emerging market volatility.
 
Key findings:
 
TREND 1: THE MARKET WELCOMES THE RIGHT REGULATIONS
 
  • Basel III (62%) and Solvency II (48%) are seen as regulations bringing the most benefits.
  • FATCA is seen as offering the fewest benefits (53%) and considered the most burdensome.
  • The greatest concerns regarding the changing regulatory environment are: increased costs (43%), a reduction in liquidity (31%) and increased counterparty credit risk charges (26%).
TREND 2: BLOCKCHAIN IS COMING SOONER THAN YOU THINK
 
87% say blockchain and distributed ledger technology will affect the market for securities services.
78% believe this technology will be actively used within the next six years.
38% say blockchain could reduce the cost of providing securities services by more than 20%.
 
 
TREND 3: EMERGING MARKETS ARE DUE A REVIVAL
 
  • 54% believe emerging markets will deliver growth rates last seen during the 2001–11 boom within the next four years.
  • 76% say that a lack of capital markets infrastructure deters them from operating or investing in otherwise attractive emerging markets.
  • 88% cite India/South Asia as the most attractive region for long-term growth prospects.

Powering the flow of global capital: Capital markets investor insights

10 November 2016

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What is driving today’s global capital marketplace? This is the question we sought to answer in our survey of more than 200 institutional investors, banks, financial sponsors, broker-dealers, sovereign institutions, corporate and financial institution issuers and investor relations executives, conducted on behalf of Deutsche Bank Global Securities Services in the summer of 2016. The results highlight three trends focusing on financial regulations, new technology and emerging market volatility.
 
Key findings:
 
TREND 1: THE MARKET WELCOMES THE RIGHT REGULATIONS
  • Basel III (62%) and Solvency II (48%) are seen as regulations bringing the most benefits.
  • FATCA is seen as offering the fewest benefits (53%) and considered the most burdensome.
  • The greatest concerns regarding the changing regulatory environment are: increased costs (43%), a reduction in liquidity (31%) and increased counterparty credit risk charges (26%).
TREND 2: BLOCKCHAIN IS COMING SOONER THAN YOU THINK
  • 87% say blockchain and distributed ledger technology will affect the market for securities services.
  • 78% believe this technology will be actively used within the next six years.
  • 38% say blockchain could reduce the cost of providing securities services by more than 20%.
TREND 3: EMERGING MARKETS ARE DUE A REVIVAL
  • 54% believe emerging markets will deliver growth rates last seen during the 2001–11 boom within the next four years.
  • 76% say that a lack of capital markets infrastructure deters them from operating or investing in otherwise attractive emerging markets.
  • 88% cite India/South Asia as the most attractive region for long-term growth prospects.

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