Building momentum: US M&A 2016

31 January 2017

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Mergermarket is pleased to present Building momentum: US M&A 2016, in association with White & Case. The report looks at the key factors and trends driving dealmaking in the United States, and what might be in store for 2017. Despite relatively slow deal activity across the first nine months of 2016, the US M&A market delivered another strong year following a string of bulge bracket deals in October and November.

Market Spotlight: Tech M&A

31 January 2017

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Last year, M&A in the technology sector came very close to the record-breaking highs of 2015. Companies looking to acquire new technologies helped to create a blockbuster third quarter, which amounted to 550 deals worth US$146.6bn. Top tech deals of 2016 included Qualcomm’s US$47bn acquisition of NXP semiconductors; SoftBank’s US$31.6bn acquisition of ARM Holdings; and Microsoft’s US$26bn acquisition of LinkedIn. After a solid year of M&A activity within the technology sector, dealmakers agree that the market is set to reach even higher levels in 2017.
 
In order to gain an understanding of the opportunities and challenges within the technology sector for the year ahead, Donnelley Financial Solutions commissioned Mergermarket to interview 25 global dealmakers from across the corporate, private equity, and investment banking communities for their views.
 
Key findings of this report include:
 
  • One-fifth (20%) of respondents believed tech dealmaking will increase significantly, while 64% said it will increase somewhat.
  • Most respondents believe the United States will retain its traditional position as the center of technology dealmaking, with 52% saying it will see the largest increase in tech M&A.
  • Twenty percent of respondents think artificial intelligence (AI) targets will draw the most attention from corporates, while nearly one-third of respondents (32%) believe that fintech will be the top tech segment for deals.

Billion Dollar Questions for Acquirers

08 February 2017

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Competition for assets continues to rise and acquirers are finding themselves paying more for their targets. With insight into M&A strategy more sought-after than ever, new sources of information can be particularly valuable. One growing source is the academic research community, which is exploring areas such as the “performance persistence” of acquirers, how to evaluate the advantages of different types of deal advisors, and the relative advantages of buying early or late in an M&A cycle.
 
The findings of academic research into M&A can provide useful insight, but how do they match up with the real-world experience of deal advisors? In order to understand what veteran dealmakers think about this research, Vintage in collaboration with Mergermarket spoke to four leading experts, as well as an M&A researcher, for their views.
 
Key topics discussed include:
 
  • What qualities and practices make for “extraordinary acquirers” in today’s highly competitive market?
  • Why is previous fund performance at private equity firms often not predictive of future fund performance?
  • Is a 2016 working paper correct in saying that late followers in a wave of deal activity can sometimes have an advantage over early movers?

Deal Drivers Americas Full Year 2016

22 February 2017

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Mergermarket is pleased to release the full-year edition of Deal Drivers Americas, in association with Merrill Corporation. This report provides an in-depth review of M&A activity for the full year of 2016, offering insights into how announced deals of FY 2016 will impact M&A for the year ahead.
 
Highlights from the report include:
 
  • Trends in top deals: In the Americas, three out of the top five deals of 2016 involved cross-border acquisitions. Cross-border transaction values alone made up more than 29% of the region’s total for the year, an all-time high.
  • Growing private equity presence: Last year saw a record 1,149 private equity deals for companies in the Americas, with an aggregate value of US$172.4bn. With nearly 3,000 private capital funds raising funds as of January 2017, the size and strength of the sector is set to grow.
  • Region in flux: The Trump administration has already begun to reverse the policies of its predecessor and negotiating with companies on their global development plans. Meanwhile, Latin America continues to suffer from economic contraction, but is expected to slowly climb out of its situation in 2017. Canada, perhaps the most stable economy of the region, is expecting a rise in outbound M&A but also faces the impact of lower commodity prices.

Market Spotlight: PE Buyouts

28 February 2017

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Global private equity buyouts reached a five-year high in 2016, totaling 2,765 deals valued at US$399.4bn. With capital growth accelerating and competition for quality targets increasing, dealmakers are forecasting a flurry of buyout activity in the year ahead.
 
In order to gain a full understanding of private equity buyout activity in 2017, Donnelley Financial Solutions along with Mergermarket interviewed global dealmakers for insight on what types of buyouts and in which sectors we will see the most activity.
 
Key findings include:
 
  • 56% of respondents believe that private equity buyout activity is set to increase in the next 12 months.
  • The majority of those surveyed (60%) view computer software, financial services, and healthcare as the top targets for private equity buyers in the coming year.
  • Respondents predicted the highest amount of cross-border buyout activity will be between Europe and Asia-Pacific in 2017.

Toppan Vite – M&A Pulse: Asset management and mutual fund M&A

08 March 2017

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The fund management space saw a flurry of M&A activity in 2016 with 303 deals globally worth US$43.3bn. While activity in 2017 is expected to increase, dealmakers face new potential obstacles in the form of the Trump administration’s changes to financial regulations and a growing number of technology firms seeking to automate portfolio management.
 
Toppan Vite, a trusted financial printing and communications company, in partnership with Mergermarket, is pleased to present the newest edition of M&A Pulse. This newsletter features responses from US-based senior dealmakers who were interviewed on the current and future state of the asset management and mutual fund market.
 
Key findings include:
 
  • 48% of respondents predict that M&A among asset management companies will somewhat increase in the coming year.
  • Nearly half of respondents (44%) expect consolidations to be the most influential driver of M&A activity in the fund management sector for 2017.
  • More than four in ten respondents (44%) point to the uncertain regulatory environment as the biggest obstacle to M&A activity.
 
See more and subscribe to Toppan Vite‘s Blog here!
 
Toppan Vite, a leader in financial printing, delivers a hassle-free experience for mission-critical content for capital markets transactions, financial reporting and regulatory compliance filings, investment companies and insurance providers. Part of the world’s largest printing company with over $13 billion in annual sales, we have the scale, financial strength and commitment to be the partner of choice for mission-critical transactions, any size, across the globe. Learn more at us.toppanvite.com

Canadian Oil & Gas 2017 Outlook

09 March 2017

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Market observers predict an increase for M&A in Canada’s oil & gas sector for 2017. Key drivers for sector activity include the search for new technologies to reduce costs and emissions as well as ongoing interest from E&P and private equity firms.
 
In order to examine the upcoming trends and opportunities within the Canadian oil & gas sector, Torys LLP commissioned Mergermarket to interview senior Canadian corporate executives and investment bankers for their insights.
 
Key findings from this report include:
 
  • More than half of respondents (54%) believe combined M&A value will also increase over the next 12 months.
  • 52% expect senior E&P companies to be the most active buyer group.
  • A majority of respondents (79%) identify the search for new technologies to create cost savings as a key driver of future M&A in the sector.
  • Dealmaking between Canada and the US remains a top priority, with 73% of respondents confirming this view.

Baltic M&A Monitor 2017

13 March 2017

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Mergermarket is pleased to present the Baltic M&A Monitor, in association with Ellex. This report provides a detailed look at M&A activity in Estonia, Latvia and Lithuania, along with forecasts for the year ahead. Consistent deal activity has characterised M&A in the Baltics in 2016. Deal volume across all three countries is up 24% year-on-year to 63 deals, the highest point in Mergermarket history. Value increased 17% to €716m over the same period. While this increase in value is more modest, it indicates renewed enthusiasm for M&A in the region. In 2016, investor confidence was high, and companies are actively pursuing growth through M&A.
 
Other highlights from the report include:
 
  • A number of sectors helped to support 2016’s activity, but TMT was the highest value sector, at €268m. When comparing combined figures from 2015 and 2016 with those from 2012 through to 2014, TMT’s share of activity rose from 12% to 14% by volume, and from 12% to 21% of total M&A by value – demonstrating the sector’s increased importance for Baltic M&A.
  • Baltic private equity performed well in 2016. There were 12 transactions with a total value of €40m, compared to ten deals valued at €11m in 2015. Activity was particularly pronounced in Estonia, where several PE investment cycles wound down in 2016.
  • Looking ahead, the Mergermarket Heat Chart, which logs ‘companies for sale stories’ for the past six months, shows that the consumer sector is generating the highest number of M&A targets (six), followed by energy, mining and utilities (five).

The New Deal: Driving insurance transformation with strategy-aligned M&A

15 March 2017

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The insurance industry is facing disruption in a variety of forms. New technologies, new competitors, new markets, new regulations, and changing consumer behaviors all offer tremendous opportunities and significant risk to the industry’s legacy business model. This has caused participants to reevaluate their business portfolio and change their strategic objectives, leading experts to conclude that the global insurance industry will soon face a wave of M&A.
 
To find out how this shift towards strategy-aligned M&A is influencing deal activity in the insurance industry, KPMG commissioned Mergermarket to interview 200 insurance M&A decision-makers across all segments and regions.
 
Key findings of this report include:
 
  • 84% of respondents plan to conduct 1-3 acquisitions in 2017, while 94% are looking to plan at least one divestiture.
  • Most insurers (62%) are either active or setting up corporate venture capabilities, with 26% of those with VC activities having more than US$1bn in allocated funding.
  • Transforming business and operating models are the main motivator for deals: 40% of insurance dealmakers plan to do so by way of partnerships and alliances, while 33% plan to undertake M&A.
  • Respondents believe that the top two regions that present the most acquisition opportunities for their company in 2017 are Asia-Pacific and North America.

Dealmakers: Mid-market M&A in Australia 2017

16 March 2017

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Mergermarket is pleased to present Dealmakers: Mid-market M&A in Australia 2017, published in association with Pitcher Partners. Total Australian M&A activity in 2016 closed 12% higher on the prior year, due mainly to a flurry of activity in the last quarter, despite global trends which saw a decline in deal activity of 4%. The nation’s mid-market saw a decline of 17%, with a strong finish towards the end of the year providing solid activity pipelines into 2017. This upswing in mid-market activity experienced in the last quarter of 2016 is expected to continue well into 2017. Current run-rates suggest deal volumes for the first half could be up by 30%-40% on 2016.
 
Key findings:
 
  • Top target sector: Leisure was the top mid-market target sector in the country for 2016, contributing to 17% of total mid-market deal volumes.
  • Top target state: New South Wales continued to be the top target state for the country’s mid-market M&A in 2016, contributing to 33% of total mid-market volume with 109 deals worth AU$5.7bn, though this proportion has shrunk from 37% for volume in 2015.
  • Cross-border deal flows: Inbound M&A occupied 35% of Australian mid-market deals in 2016, up from 33% in 2015, with the top bidder countries being the United States, China and the United Kingdom. Australia’s top target geographies for outbound mid-market M&A in 2016 were the United States, New Zealand and China, with acquirers being most interested in the TMT sector.
  • Industries to watch: Healthcare and fintech, spurred into action by optimism and consumer confidence inspired by low interest rates and cheap and readily available debt.

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