Tag archives: M&A trends

(Un)masking value: how the data masking market can impact M&A activity

Recent rumblings about the “data masking” market have put this concept on the radar of many, which warrants a closer look at the relevant trends and the potential of data masking. The information age has made cybersecurity a necessity and the increase of data breaches and malware attacks have led to calls for greater data protection.

What is data masking?

Perhaps surprisingly, the purpose of data masking is more than just obfuscating original data in order to protect it. An additional layer is the process of creating a structurally similar, yet inauthentic version, of an organization’s data that can be … Continue Reading

“Weeding out the competition” – an update on M&A activity in the cannabis sector

As discussed in previously, the legalization of cannabis in October 2018 sparked a flurry of activity in the Canadian market, as both foreign and domestic investors were eager to enter the space. Notably, in 2018, M&A transactions peaked with over 700 deals completed in the cannabis sector, the total value of which exceeded US$12 billion.

While high entry costs and capital expenditures may continue to be drivers of consolidation in the cannabis sector, there are other emerging factors that may significantly impact the trajectory of M&A activity. With the 2019 year-end rapidly approaching, a reflection on some of these … Continue Reading

“DARQ” technology and disruptive M&A: gearing up for the “post-digital era”

As technology has become embedded into most parts of our lives, the majority of companies have completed a digitization process. Maintaining a digital platform has become the new norm, and increasingly sophisticated technologies continue to be developed. Accenture’s Technology Vision 2019 (Vision Report), describes this as the transition to the “post-digital era,” where “digital” is a new normal and is no longer a sign, on its own, of innovation. The Vision Report highlights main technology trends that companies will need to get ahead of in order to become leaders.

The main questions related to this “post-digital shift” are; … Continue Reading

Good eats: rising interest in dairy & meat alternatives driving M&A activity

As consumer demand for dairy and meat alternatives increases, established food manufacturers are looking to supplement their offerings by entering into M&A transactions with emerging meat and dairy alternative manufacturers. According to a recent report by the Good Food Institute (GFI), there have been 46 completed investments and acquisitions of vegan food manufacturers in 2018 alone, with the largest acquisition having a value of $12.5 billion. Many leaders in the meat industry are starting to acquire and invest in the dairy and meat alternatives market to tap into consumer demand. Investing in vegan alternatives is essential for food manufacturers to … Continue Reading

Uses of blockchain in the M&A process

We have previously explored some potential uses of blockchain in the M&A process. Generally, blockchain refers to a growing list of blocks linked by cryptography. Each block contains a timestamp and a link to the previous block. When a new block is added to the growing list, it is verified by independent parties on the peer-to-peer network and is by design, decentralized and resistant to modification of the data. The possibilities are immense – but ultimately, what are some of the ways that blockchain can help the M&A process?

One key area may be with the use of “smart contracts” … Continue Reading

Private equity and the “buy-and-build” boom

Private equity funds are increasingly turning to a “buy-and-build” (B&B) approach to boost revenues, realize value and increase returns. The B&B approach, also referred to as an “add-on” strategy, involves the purchase of a platform company, followed by the purchase of multiple related and complimentary targets through share or asset acquisitions. B&B strategies offer an alternative to otherwise potentially slow and cumbersome organic growth by setting the table for private equity funds to capture synergies through vertical integration, combined operational strength and leveraging a whole that is worth significantly more than the sum of its parts.

B&B: the

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Asset and wealth management M&A activities in 2018 and beyond

Merger and acquisition activities in 2018 in the asset and wealth management sector logged a total of 140 deals, up 5% from last year. According to an overview published by PwC, the total announced value of the M&A deals was US$14.9 billion, which represented a year-over-year increase up 72% – the highest percentage increase since 2009. Interestingly, almost 40% of deals in this sector were made during the last quarter of 2018, totalling US$9.9 billion in deal value. Specifically, there were three mega-deals that exceeded US$1 billion during the fourth quarter. With respect to deal volume, the fourth quarter … Continue Reading

M&A activity in the insurance sector reaching new heights

M&A activity in the insurance sector in North America declined in the years immediately following the financial crisis, and has peaked in recent years. We previously reported on the boom in the North American M&A insurance sector in 2016, where Q1 saw a record high in insurance agency M&A deals with 109 transactions reported. These trends continued throughout 2016, which ended with 446 insurance M&A deals, and into 2017, and 2018, which Optis Partners LLC (Optis) reported saw record levels of M&A deals among insurance brokers. Although Optis reported 16% fewer deals in the first half of … Continue Reading

U.S. M&A: full speed ahead for 2019

Optimism is the name of the game for the U.S. M&A market. A recent report by Deloitte cites positive tax reform, a relaxed regulatory climate and growing cash reserves as the primary reasons for expecting 2019 to be a big year for M&A. 79% of the 1,000 U.S. corporate executives and private equity firms surveyed said their organizations will close more deals in 2019 than 2018. 70% of the respondents also expect the aggregate value of deals closed to exceed 2018, with over half of deals expected to be between $500 million and $10 billion.

Interestingly, divestitures are expected to … Continue Reading

Record year predicted for the cybersecurity industry

With a growing reliance on technology, it does not come as much of a surprise that the importance of cybersecurity is increasing as well. In its Mid-year Market Review, Momentum Cyber reported that $2.3 billion had already been lost as a result of cryptocurrency breaches. This staggering loss may be one of the many reasons why there is a greater focus on cybersecurity and why the number of mergers and acquisitions (“M&A”) in the cybersecurity sector has been rising. It was even predicted in August 2018 that this would be a record year for the industry.

This prediction … Continue Reading

Ripples of #MeToo in the M&A world: examining the “Weinstein Clause”

A recent report Bloomberg indicates the increasing relevance of buyers staying away from a “#MeToo company” in M&A transactions – i.e., a company facing sexual misconduct allegations. This does not suggest that buyers are staying away. Instead, buyers are developing novel ways of addressing the risk brought upon by a “#MeToo company.”

The first method that has seen increased prominence is by incorporation of a legal representation in the M&A agreement, requiring the target company to reveal allegations of sexual harassment. Known as a “Weinstein Clause” (also referred to as a “#MeToo rep”), this representation, which ultimately hinges on a … Continue Reading

Evaluating the representation of women in the M&A industry

Is M&A still a male dominated industry? Back in its 2011 article, Reuters referred to M&A as a “man’s game”. They found that only 15% of executives and senior level managers in US investment banking and securities dealing industries were women. A 2011 survey found that 83% of female finance executives perceived the glass-ceiling to be a very real and prevalent factor preventing them from moving forward. Further there were a small number of women graduating from business schools choosing to enter the financing and accounting market – nearly half the number of the men in the recruitment process.… Continue Reading

Increased M&A activity predicted as insurance industry evolves

The insurance industry is an evolving landscape. The emergence of new technologies and increased competition has created pressure to innovate while casting doubt on the viability of focusing on strategies emphasizing organic growth. These factors may drive an increase in M&A activity in the insurance industry, according to a report from KPMG International.

The report, which is based on interviews with insurance executives from around the world, concludes that the majority of insurance companies are seeking M&A opportunities in an effort to deploy their capital in pursuit of transformative growth. However, these companies will likely require significant support from M&A … Continue Reading

A forward look into emerging technologies in M&A

As previously noted, businesses are keen to shine their spotlights on the surge of disruptive technology, particularly with the opportunities it stands to introduce, the existing standards it proposes to displace, and the upside it promises for bottom lines. In recent years, the rise of disruptive technology has created a boom for some industries while potentially upending others. For legal practice, the result is the same in both instances – these technologies have created new challenges, particularly for corporate M&A lawyers.

A prominent example of a disruptive technology is cryptocurrency. The exponential growth of cryptocurrency and its related technologies has … Continue Reading

Waste is picking up! M&A developments in the waste management and recycling industry

Historically a highly fragmented industry, the waste management and recycling sector has undergone a process of consolidation and increased M&A activity over the past several years. Analysts have offered various explanations for this trend, ranging from a desire for larger companies to expand their geographic coverage to a rise in clean-tech and recycling businesses.

Although typically not an industry that attracts the limelight, investors now view waste management and recycling companies as attractive targets due to the high barriers to entry and the presumed lower risk that comes with businesses providing essential services.[1] As a result of these and … Continue Reading

The Canadian hotel space: ripe for investment

The outlook for the Canadian Hotel segment is looking ripe for investment according to a recently released report from the CBRE. The CBRE Canada’s 2018 Hotels Outlook Report showed that there was strong operational performance which is expected to continue in this year.

The report indicated that hotel-investment volume reached $3.4 billion in 2017 and $4.1 billion in 2016. These years were marked by a higher volume of merger and acquisition deals which had not been a trend in this industry for quite some time. The healthy state of Canada’s hospitality segment is positively influenced by low-interest rates, lower … Continue Reading

A healthy dose of deal-making: M&A trends in the US and Canadian healthcare sector

In the first quarter of 2018, M&A activity across the world hit a 17 year record high according to Mergermarket’s Q1 2018 Global M&A Report. This is an 18 percent increase in value compared to the first quarter of 2017. This increase was affected by the surge in deal-making seen at the end of 2017 which carried over into 2018 as the US experienced mega US healthcare deals. In fact, US M&A activity during Q1 2018 was reported to represent 44.2% of the total global share. According to data from Bloomberg, the healthcare sector has already reported $156 billion … Continue Reading

The tech takeover: disruptive technology as a driver of M&A

A relentless parade of new technologies is unfolding on many fronts – one of which includes the M&A scene. While not every emerging technology will alter a business’ landscape, certain technologies have the potential to disrupt the status quo, alter the way companies operate and rearrange value pools. These “disruptive technologies” can quickly displace established systems and set new industry standards.

As an example, earlier this year, Toronto-Dominion Bank made headlines for its acquisition of “Layer 6 AI”, a start-up company which uses artificial intelligence to analyze various forms of data and anticipate an individual customer’s needs. This announcement came … Continue Reading

Is this the end of European conglomerates?

Is this the end of European conglomerates?

The end may be in sight for European conglomerates. Activist investor Christer Gardell of Cevian Capital predicts a growing trend of “demergers” in the next five to seven years, due in large part to an increasing number of European conglomerates engaging in in spin-off transactions, or “spin-offs.”

Generally, a spin-off refers to a transaction in which a parent company sells or distributes new shares of one of its business units, after which the business unit then becomes a new legally distinct and independent company. The use of spin-offs by conglomerates to “demerge” may … Continue Reading

M&A outlook 2018: find out more

Over the last 18 months there has been substantial global, geopolitical uncertainty, including the run-up to, and the eventual election of President Trump in the US presidential elections, the fall-out from the UK’s “Brexit” referendum, the elections across Europe and the North Korean crisis in Asia. These events have had global implications but somewhat surprisingly global M&A has, on the whole, withstood these turbulent times.

Norton Rose Fulbright’s corporate practice has published an article on global M&A trends and forecasts. Please check it out!

Stay informed on M&A developments and subscribe to our blog today.Continue Reading

Optimistic M&A outlook for 2017

As we begin 2017, the 1,000 corporate and private equity executives surveyed for Deloitte’s M&A Trends Year-end report 2016 display optimism for the coming year. The survey was conducted in September 2016 and included participants from companies or private equity firms with annual revenues of $10 million or more, representing 18 industries.

Respondents expect a rebound year from 2016, with 86% of surveyed private equity and 71% of surveyed corporate dealmakers expecting to close more deals this year. Not only is deal volume expected to increase, but 64% of all respondents also expect deal size to increase. Divestitures appear poised … Continue Reading

Trends in Canadian cross-border M&A

In recent years, cross-border M&A activity involving Canadian companies has soared, and 2016 gave rise to a record high in cross-border deal value. In Q3 2016 alone, Canadian companies were involved in cross-border transactions worth over CDN$77.7 billion, easily eclipsing the CND$21.7 billion in deal value from the previous quarter and representing 41% of all Canadian announcements. In particular, outbound deal volume continued to outpace inbound deal volume by a ratio of 1.7:1, confirming to Ed Giacomelli, Managing Director at Crosbie & Company, “the strategic importance to Canadian corporations of growth by acquisition.”

In a recent report by Mergermarket … Continue Reading

Discipline: a key deal factor for mid-market companies

Earlier this year, we reviewed Deloitte and Touche LLP’s (Deloitte) 2016 survey of M&A trends (the Survey), which predicted that the year would match or exceed deal volume as compared to 2015. Deloitte recently published an article (the Article) which delves deeper into its Survey results from mid-sized companies, concluding that this demographic of the corporate world should be looking to implement more disciplined measures in deal-making.

The Survey polled approximately 1,800 companies, of which half comprised of mid-sized companies. These companies’ responses indicate that they are more concerned than their large-cap counterparts with “obtaining bargain-priced … Continue Reading

M&A trends update

Earlier this month, we reported on the slow-down of M&A activity in the first quarter of 2016. Despite this challenging start to the year, a new report from Deloitte & Touche LLP entitled “M&A Trends Report 2016” found that executives remain optimistic about M&A activity going forward. The report provides that 87 percent of the 2,300 U.S. survey respondents said that they expected their deal activity to match or exceed 2015, which was the busiest year ever for mergers and acquisitions.

Respondents in Deloitte & Touche LLP’s survey expected that technology would be the top industry for … Continue Reading

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