Tag archives: Mergermarket

Artificial intelligence: real results

Earlier this year, we discussed the increasing use of technology in the M&A deal process. To recap, a recent Mergermarket study revealed that the use of technology and big data were likely factors in the increasing frequency of unsolicited bids and corresponding decrease in frequency of broad auctions. Building on our earlier discussion, we now consider below the ways in which technology is used to facilitate deals.

Due diligence process

Artificial intelligence has already had significant influence on the due diligence process. For example, Kira Systems, an artificial intelligence contract analysis company, claims that their software has been used … Continue Reading

Mergermarket report highlights global real estate M&A trends and forecasts

In its June 2017 edition of Venue Market Spotlight (the Report), Mergermarket explored current and projected developments in the real estate M&A sector by surveying 25 global dealmakers.

Overall market activity

Of the respondents surveyed about market activity in the next 12 months, 44% predict that real estate M&A activity is on the decline, 24% believe that activity will increase “somewhat,” and 24% predict that activity will remain the same. The Report posits that opinions were geographically influenced. Of the respondents with optimistic outlooks, the majority were based in either the Asia-Pacific (APAC) region or in Europe.… Continue Reading

What a Bank of Canada interest rate hike means for dealmakers

On July 12, 2017, the Bank of Canada raised its overnight lending rate to 0.75 per cent from 0.5 per cent. This was the first such increase in almost 7 years, after a prolonged policy of fiscal stimulus in the wake of the economic recession.

While the need for an interest rate hike in the current economic climate is certainly contentious, the fundamental effects of rising interest rates are well known. At a macro level, borrowing and spending cash becomes more expensive, and saving becomes relatively attractive. The effect of an interest rate hike on M&A activity … Continue Reading

Modern M&A deal process: focus on negotiated sales and increased usage of technology

Technology is increasingly playing a bigger role in M&A deals, transforming the way transactions are priced, negotiated and completed. The use of different platforms is facilitating transmission of deal information to a wider group, and as a result, crucial stages in a deal can now be done remotely and simultaneously by several deal parties.

Moving away from broad auctions

Mergermarket released a survey-study on M&A deal process finding that sell-side deal-sourcing has been moving away from broad auctions. Rather, negotiated sales are becoming the deal-sourcing method of choice.

The move towards negotiated sales is partially driven by the important role … Continue Reading

Trend report: increased M&A deal values across the Americas for Q1 2017

On April 25, Mergermarket released its Q1 2017 Regional Flash Reports describing the M&A climate, trends and developments throughout the Americas during the first quarter of 2017.

The Canada’s Trend Report indicates that Canadian M&A has remained strong with 111 deals in Q1 2017 worth US$ 35.8bn. This is a robust start for 2017 as compared to the 151 deals in Q1 2016 representing US $17.1bn, and is in line with the trend of higher valuations for fewer deals as seen across the globe. The top Canadian sector for Q1 2017 was Energy, Mining and Utilities (EMU) with … Continue Reading

The Canada Infrastructure Bank: big plans for big projects

Last month’s federal budget reaffirmed the government’s plans to establish a new Canada Infrastructure Bank (the Infrastructure Bank) and vest it with the responsibility of spending at least $35 billion in infrastructure over 11 years. The Infrastructure Bank is intended to pool public funds with private investments for infrastructure projects. Along the way, the Infrastructure Bank will build up expertise in packaging, financing and managing projects, so as to attract institutional investors and investment funds.

The Infrastructure Bank goes hand in hand with Prime Minister Trudeau’s desire to attract investments into Canadian infrastructure projects. In the fall of 2016Continue Reading

Canadian M&A expected to rise in 2017

Fuelled by low interest rates, strong corporate balance sheets and stable finances, 2016 was a strong year for Canadian M&A. Looking forward, Citi Canada, in association with Mergermarket, surveyed a range of Canadian dealmakers to gauge their expectations for Canadian M&A in 2017. The results of this survey are set out in a recent report entitled Navigating Change: Canadian M&A in a period of global upheaval. Highlights of the report are set out below:

  • Deal volume. Two-thirds of respondents expect to see a rise in Canadian M&A volume in 2017 compared to 2016.
  • Free cash. The majority
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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

The PE lifecycle is expanding

While private equity firms are enjoying more dry powder than ever, the overall fund lifecycle is expanding. Mergermarket interviewed private equity partners, directors and principals from across the United States and their responses point to increases in time in all three lifecycle segments of a fund: raising capital, searching for suitable targets, and exit.

Prolonged fundraising

For the majority of US GPs, the time period spent raising money from investors for their most recent fund was longer than the preceding one, 76% of the respondents needing between 9 to 18 months total. While fund lifecycles are extending, the amount of … Continue Reading

M&A transactions between fintech companies and traditional banks

Financial technology (fintech) companies like Square, Wealthsimple and Mint are already having disruptive effects in their respective industries, changing the way Canadians pay for goods and services, invest their savings, and manage their finances. A recent survey shows that Canadians are becoming less dependent on traditional banks given the variety of options to self-manage their finances.

At the same time, financings in the fintech sector have ramped up over the last five years. $7.4 billion was raised by venture-backed fintech firms in the first six months of 2016. As discussed in a previous blog post, there is … Continue Reading

M&A overview and outlook for Q4 2016

After the record breaking year that was 2015, MergerMarket’s 2016 Half-Year Edition reports that M&A activity in the first half of 2016 has fallen by 10% in total deals and 30% in deal value compared to the same time last year. Despite this decline, 2016 should be looked upon favourably so far, considering the worldwide political instability it has faced with the United Kingdom’s decision to leave the European Union (Brexit) and the uncertainty surrounding the United States Presidential election. Both of these events have contributed to a decrease in the volume and value of transactions in 2016. … Continue Reading

A global overview of M&A activity: August 2016

World MapMergerMarket Group recently published its September edition of Monthly M&A Insider which reported on mergers and acquisitions activity around the world for the month of August 2016. More than two thirds into the year, August was no exception to the recent rather sluggish growth in M&A activity, especially compared to the record-breaking year for M&A in 2015.

Global M&A

August saw a total of 946 deals worth US$182.2bn, the lowest-valued August since 2013 (US$152.7bn) and down 34.7% from August 2015’s US$278.9bn. The Energy, Mining & Utilities sector spearheaded activity by contributing 15.8% to the total global market share with 84 … Continue Reading

M&A activity in the healthcare sector is on the rise

M&A activity in the healthcare industry has been on an upwards trend since our last update. Good Foundations: Building Healthcare M&A and Real Estate, a report by Mergermarket on deal-making trends in the industry, found that about 90% of the respondents expect healthcare M&A to rise over the next year. The value of healthcare deals in North America increased by 28% and reached a total of US$298 billion in 2015.

The North American healthcare industry is rapidly evolving and demanding that companies innovate to stay relevant. Several fundamental shifts, such as the move from fee-for-service to value-based care, … Continue Reading

A global overview of M&A activity: H1 2016

MergerMarket Group recently published its July edition of Monthly M&A Insider which reported on mergers and acquisitions activity around the world during the first half of 2016, which was marked by a departure from last year’s record highs.

Global M&A

Global deal values fell by 26.8% to US$1.3tn across 7,794 transactions from H1 2015’s US$1.8tn across 8730 transactions. The Industrials & Chemicals sector lead the way with US$244bn in transaction value and 1486 deals, despite New Treasury rules aimed at dissuading tax inversions leading to the termination of the US$183.7bn Pfizer and Allergan transaction. Second most active sector has been … Continue Reading

Spotlight on Ukraine: a promising future for M&A activity

In March 2014, this blog featured an article discussing the effect of the recent crisis in Ukraine on M&A activity. The crisis began in November 2013 when Ukrainians protested en masse after then-president Viktor Yanukovych failed to sign an association agreement with the European Union. Yanukovyvh was ousted in February 2014. During that time and following, violent protest, armed conflict between separatist forces and the Ukrainian government, and the annexation of Crimea by Russia, played a substantial role in the contraction of Ukraine’s economy by 8% in the year 2014. Since this time, Ukraine has undertaken a number … Continue Reading

An overview of global M&A activity: 2015 into 2016

2015 was an extraordinary year for global M&A activity. Mergermarket recorded almost 17,000 transactions worth a remarkable US$4.3tn. This topped the previous record set in 2014 by over 30%. The race for top performing sector this year was very close. Energy Mining & Utilities won with US$630bn in deal value; however, the top performers were only separated by US$150bn. The other four sectors in order are: Pharma, Medical and Biotech, Consumer, Financial Services and Industrial Chemicals.

North America

Once again North American markets lead the way with almost 1/3 of global deals and nearly 50% of global deal value. The … Continue Reading

Year in review: deal drivers in the Americas in 2015

Mergermarket recently released its 2015 full-year edition of Deal Drivers Americas (the Review). This comprehensive review of M&A activity in the Americas confirmed that 2015 was a year of mega-deals. Transactions involving giants such as Pfizer, Time Warner Cable, and Kraft contributed to an increase of 30% in M&A value, reaching a total of US$4.28 trillion across North America. In the US alone, deal value rose 40% since 2014, hitting a record high of almost US$2 trillion.

The Review evaluated by sector and by region. Some of the sector highlights include:

  • Technology, media and telecom: Technology, media and telecom
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2016 outlook for spinoff, carve out and asset sale activities

Of the many ways a corporation can divest its assets or shares to create value, asset sales, equity carve outs and spinoffs are some of the most common methods. In an asset sale, a business sells its assets in exchange for cash proceeds or other forms of consideration. An equity carve out is where a company separates out assets into a separate company (usually a subsidiary) and issues a minority interest in the subsidiary to the market through an IPO. A spinoff transaction is where assets are spun off into a new independent business and existing shareholders receive shares of … Continue Reading

M&A in China amid economic uncertainty

To the casual observer, the economic outlook in the Asia Pacific region, and China in particular, has been rosy for a long time, with international attention focused on fast-paced economic growth and emerging wealth in the region. However, the beginning of 2016 has proven to be difficult for Chinese government officials as they contend with tumultuous stock markets and newly released 2015 economic figures. As far as the outlook on M&A is concerned, Chinese companies’ overseas mergers and acquisitions were strong in 2015 and are expected to continue growing while spending on foreign M&A into China was down significantly in … Continue Reading

A global overview of December 2015 M&A activity

According to Mergermarket’s December insider, November 2015 was a record setting month for M&A activity. By the end of the month, global M&A value reached US$3.9tn which surpassed the 2007 full year record by almost 6%. This record came on a drop in volume by 1,228 transactions which further cements 2015 as the year of the mega deal. The top sector was Pharma, Medical & Biotech (PMB) with 84 transactions representing US$201.3bn. The driver behind this sector was the record breaking US$183.7bn Pfizer Inc.’s bid for Allergan PLC. This represented over 90% of PMB’s total deal … Continue Reading

2015: the year of the mega-deal

Last week’s announcement of a proposed transaction in the food and beverage industry for a staggering US $107 billion does not stand alone as a mega-deal in 2015, according to a recent Mergermarket report. The deal is part of what has been a record year for deal valuations. Through the first three quarters of this 2015, there have been a total of six deals worth more than US $50 billion. As a result of these mega-deals, deal value has totalled US $2.7 trillion, up 21% from the first three quarters of last year.

The report lists a number of … Continue Reading

M&A activity is booming in Asia’s renewable energy market

wind-680x220The first half of the decade has seen a swift rise in green-house gas (GHG) emissions in Asia. Consequently, China is now the world’s largest emitter of carbon dioxide from the consumption of energy, accounting for over 25% of global emissions. This rapid intensification has also created an active and robust renewable energy market in China and other Asian countries.

According to a report published by Mergermarket, the renewable energy market in the Asia-Pacific is poised for significant increases. In 2014, Asia-Pacific accounted for 23.2% of worldwide deal value in renewables, and in H1 2015 rose … Continue Reading

A global overview of M&A activity

Despite growing concerns over the state of the Chinese economy, global M&A activity has been quietly growing. According to Mergermarket’s September insider, August 2015 was the highest valued August ever with US$297.8bn total deal value. This 12.7% increase came despite 335 fewer deals when compared to August 2014. The top sector was Industrials & Chemicals with 203 deals accounting for US$76.6bn, a remarkable 291% increase over the previous year. Extraordinarily, 2015 has also been the second highest valued 8 months in Mergermarket history with 7,863 deals worth US$2.5tn falling just behind the record year of 2007 when there were … Continue Reading

Global M&A in the first half of 2015

Similarly to American M&A in the first half of 2015, the first half of 2015 was remarkably active on the global mergers and acquisitions front. According to a recent Mergermarket report, total deal value topped US$1.7 trillion. This represents an increase of 15.2% over the first six months of 2014, and only 15.4% behind the record-setting first half of 2007, when US$2.1 trillion worth of deals were completed. With 7,136 transactions, it is interesting to note that total deal volume actually decreased by 15.7% compared to the same time period last year, but higher valuations explained the market’s … Continue Reading

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