M&A Deal Volume Remains Flat Through FY 2016
The next edition of our Intralinks Deal Flow Predictor (DFP), an independently verified indicator of future M&A announcements, through Q4 2016 is here.
10 August 2016
The new edition of our Intralinks Deal Flow Predictor — an independently verified indicator of future mergers and acquisitions (M&A) announcements — is here. In this forecast through Q4 2016, similar to the results in our Q3 2016 report, growth is flat with a less than one percent increase predicted in the total number of M&A deals to be announced globally in FY 2016 compared to FY 2015.
Deal Volume and Market Trends Through Q4 2016
While global growth remains flat, regionally, there are noteworthy variations. In Europe, the Middle East & Africa (EMEA) and Latin America (LATAM), early-stage M&A deal volume grew by nearly 16 and 11 percent, respectively. In North America (NA) and Asia Pacific (APAC), early-stage M&A activity declined by 11 percent and 0.4 percent, respectively.
- EMEA is showing stronger levels of growth, and even LATAM has staged a recovery despite a continued slump in Brazil. In EMEA, the concern is primarily for the UK following the majority vote in favor of “Brexit”. The rest of EMEA is mostly performing strongly.
- LATAM has staged a recovery despite the continued slump in Brazil and weakness in Mexico; most other countries in the region are showing double-digit increases in early-stage M&A activity.
- NA is seeing lower levels of activity, where a slowdown in economic growth, the prospect of further US Fed interest rate rises in 2016 and uncertainty over the outcome of the US presidential election in November are combining to cause dealmakers to pause for breath.
- In APAC, Southeast Asia and North Asia are showing the weakest levels of growth, with the rest of the region, especially India and Australia, performing strongly.
Globally, all sectors apart from Energy & Power, Consumer & Retail and Industrials experienced YoY declines in early-stage M&A activity in Q2 2016.
Polling more than 1,700 M&A professionals, the latest Intralinks quarterly Global M&A Sentiment Survey, conducted in June 2016 found that sentiment about the M&A market has increased slightly since last quarter, which is a surprising result considering this is a US election year.
Here are some highlights from the survey data:
- 82 percent believe the impact of a strong US dollar on worldwide M&A will result in an increase in US companies acquiring overseas, while 72 percent believe it will not result in an increase in foreign companies acquiring US assets.
- 52 percent of dealmakers think a Donald Trump presidency would be negative for the M&A market, while only 22 percent believe a Hillary Clinton presidency would have a negative impact on M&A.
To get a full snapshot of activities by both region and market sector, download your free copy of the Intralinks Deal Flow Predictor here.
Matt Porzio joined Intralinks in 2003. As SVP Marketing & Strategic Business Development, he is responsible for managing and driving the strategic direction for Intralinks Dealspace including virtual data room and full deal lifecycle solutions for the M&A, Private Equity, Advisory, Corporate Development and Restructuring communities. Before joining Intralinks, he was a senior associate at Metzler, a German advisory firm, focused on cross-border M&A transactions.