Brazil's M&A Market Continues to Run Hot

Unlike many of Intralinks’ markets around the world, law firms in Brazil have typically been the strongest advocates for the company, more so even than investment banks. Many of the leading local law firms have recognized recently that standardizing and optimizing the way they run due diligence processes is critical to ensuring the best deal execution for their M&A clients.


5 April 2011

Just when you thought the Brazil M&A market couldn’t get any hotter—BAM!  We recently released our end of year and Q4 2010 Brazil Intralinks Deal Flow Indicator (DFI) Report. If you’ve been following the market, you won’t be surprised  to learn that we reported a 35% increase in Brazil M&A deal activity in 2010 versus 2009. In just the last quarter of 2010 there was a 28% increase in deal activity in Brazil versus Q3 2010.

Intralinks has been in a strong market leadership position throughout this high growth period. In 2010 we were used in 46% of all M&A deals in Brazil with a value of more than U.S. $25 million. With nearly half the market, our deal counts are a legitimate leading indicator of how the broader market will trend, which enabled us to publish our first ever Brazil-specific DFI Report.

The Intralinks DFI provides an early view of aggregate deal flow activity and trends in the market. Intralinks has been producing quarterly Global DFIs for three years that cover M&A deal activity trends in Latin America, as well as Asia-Pacific, Europe/Middle East/Africa and North America. We’ve been monitoring the Brazilian M&A market as part of that process.

One of the most interesting stats from the Brazil Intralinks DFI Report is that 70% of deals on our platform had parties from at least two different countries logging on to review deal information. Why is this interesting? Compared to the rest of the world, where only 55% of deals have that level of cross-border interest, Brazil clearly has international investors’ attentions. And why not? As I mentioned in my last blog, Brazil enjoys rich natural resources, a boom in infrastructure investment, strong interest from international Private Equity investors, and a growing middle class.

And it’s not just me that’s excited about Brazil’s DFI results. Brasil Econômico, a leading Brazilian business newspaper, Bloomberg News, and a number of online publications have all run stories about the Intralinks DFI, and our recent success in in the local market.

With Intralinks adoption at nearly 50% of the market, and more M&A deal activity than ever before, our largest clients in Brazil are beginning to change the way they approach not only Intralinks but the entire due diligence process. Unlike many of Intralinks’ markets around the world, law firms in Brazil have typically been the strongest advocates for the company, more so even than investment banks. Many of the leading local law firms have recognized recently that standardizing and optimizing the way they run due diligence processes is critical to ensuring the best deal execution for their M&A clients. A significant number of the larger firms are actually creating due diligence centers, which work as a shared service for all partners, thereby eliminating deal-by-deal decision making around due diligence, and ensuring that best practices – like the use of Intralinks - are followed in every process.

In addition to the work we’re doing directly with law firms, we continue our commitment in helping our clients better understand and navigate the changing Brazilian landscape. We recently co-hosted an event with Mergermarket, “Dealmaking in Brazil: Spotlight on M&A, IPOs and Joint Ventures” featured leading M&A professionals from Advent International, BTG Pactual, Santander Global Banking & Markets, Darby Overseas Investments, and Veirano Advogados. In addition to a discussion of some of the major deals in 2010, the 100 attendees were offered advice on how best to get their deals done and provided an outlook for 2011 and beyond.