Asia Pacific M&A Industry Bullish Despite Credit Crunch, Finds IntraLinks M&A Survey

• IntraLinks M&A Monitor: China expected to see highest M&A activity over the next twelve months
• The majority of Asian respondents are optimistic about market outlook
• Government intervention is biggest potential obstacle to M&A growth
• Competitive auction process most important factor in raising the price of an asset

Hong Kong, 17th October 2007
China (45%) and India (26%) are expected to have the highest deal activity in Asia in the coming year, finds the first Asia Pacific M&A Monitor conducted for IntraLinks, the leading provider of online workspaces. The survey respondents were M&A professionals including corporates, bankers, lawyers and advisors.
 
The majority of survey respondents express a positive outlook for M&A activity in the coming year. The level of optimism, however, varies from region to region: A full 84% of respondents focussing on Southeast Asia are confident about the market in the coming year, while M&A professionals focussing on North Asia are slightly more cautious but still 73% expressing an optimistic view. Across sectors, the financial services industry is expected to see the highest level of M&A activity (26%) followed by the energy sector (19%).

Although the Asia Pacific M&A market is expected to remain buoyant in the next twelve months, the current credit crunch causes concern, as one respondent stated:
 
“The subprime issues hovering over the US and European markets could result in an upward adjustment in pricing and re-introduction of more stringent loan covenants. This may prove to be a significant hurdle for would be acquirers.”
Banker, Philippines

Respondents in both North Asia (87%) and Southeast Asia (80%) cite strategic reasons as a primary factor for pursuing takeovers. Cheap debt, which has fuelled M&A activity in recent years, is now considered least important. Only 29% of North Asian and 46% of Southeast Asian M&A professionals see cheap debt as influential in driving M&A activity – probably a consequence of the recent credit squeeze.

Government intervention is considered the biggest obstacle to M&A growth by North Asian (21%) and Southeast Asian (27%) respondents. M&A professionals seem particularly concerned about the protectionist measures of some governments which threaten the success of M&A deals. A respondent summarised this concern as follows:

“The rising desire of the government to support domestic corporations by shaping the M&A activities is posing more and more difficulty for M&A deals.”
Corporate, China

The primary factor cited by respondents across Asia as influencing the success of an M&A transaction was sector attractiveness (26%), while the most important factor in raising the price of an asset was a competitive auction process (36%). Providing the ability for multiple bidder parties to see documents simultaneously was listed as the most important factor in saving time on a transaction by all Asian M&A professionals, with Southeast Asian respondent considering it most significant (80%). A massive 73% of total respondents preferred the use of virtual datarooms over other methods of sharing information. More than 90% of respondents who have already used IntraLinks would recommend it to others.

Deal activity in Asia in the coming year will be dominated by US private equity firms and cross-border consolidation. Almost a third of respondents (32%) think that US private equity firms buying Asian assets will be the most important deal type. Asian corporate cross-border transactions are also expected to be very significant (29%). When it comes to Asian companies acquiring US or European assets, China is expected to lead the field. A full 59% of respondent see Chinese companies as the most acquisitive, followed by Indian corporates (27%).

Commenting on the survey results, Patrick Wack, Chairman of IntraLinks, Inc. said:
 
“It is reassuring to see the high levels of optimism in the Asian market. The credit crunch has not dented the positive outlook in Asia Pacific. Thanks to local powerhouses, China and India, this region has a key role to play in the development of international M&A activity.”

“Secure online workspaces have not only gained broad acceptance among the M&A community but are playing a pivotal role in increasing the success of the deal process. Running a competitive M&A process, reaching out to international bidders while being able to multi-task on deals, and avoiding travel costs are all making IntraLinks virtual datarooms the preferred choice for both sell-side and buy-side participants.”

About IntraLinks
IntraLinks® On-Demand Workspaces™ connect business communities and accelerate the intelligent flow of information and documents among participants. Through IntraLinks' secure, neutral, online environments, companies are better able to compete globally by accelerating essential business processes, simplifying communication and fostering rapid workflow. IntraLinks is easily accessible anywhere, anytime, using a web browser.

Since 1997, more than 700,000 participants representing over 80,000 organizations worldwide have used IntraLinks On-Demand Workspaces™ to communicate and collaborate on thousands of projects and transactions. IntraLinks has been adopted widely in the financial services and pharmaceutical industries, where its clients include AstraZeneca Pharmaceuticals LP, Bank of America, Bear Stearns, Deutsche Bank, FDIC, TD Securities, Thomas Weisel Partners and WestLB, among hundreds of others. Founded in 1996, IntraLinks is headquartered in New York with offices around the world.