Q3 2020 SS&C Intralinks Deal Flow Predictor: Assessing the M&A Slowdown in Latin America
M&A activity in Latin America is almost at a standstill due to COVID-19.
19 May 2020
The COVID-19 pandemic has caused financial and economic havoc in Latin America (LATAM), and the after-effects won’t be temporary. They’ll create a new normal.
Right now – except for deals already in the closing stage or bilateral deals – new transactions have suffered a significant slowdown. A good portion of ongoing M&A deals have been interrupted or delayed.
Take Brazil. The majority of IPOs are now on hold. We are seeing at least a 30 to 40 percent reduction on the volume of M&A deals being launched in Q2 2020, compared to the same period last year.
TMT, Health and Agriculture are generating deals in LATAM. Retail, Aviation, Travel & Entertainment and Real Estate segments are showing a larger volume of big corporates undergoing restructuring or bankruptcy processes. There are movements of divestments from Oil & Gas companies in some countries here, as well.
Challenges and change ahead
Going forward, the process of creating valuations from the sell-side will be a big challenge. Any pre-COVID-19 business plan is no longer valid.
Economies will need time to rebound. Sectors like Aviation have suffered severely. And regulations in Latin America are being adjusted to reflect the new norm – like allowing public companies to hold virtual shareholder meetings (VSMs).
Consumer behavior is going to change. The way buyers will value assets may change too. And the assumptions and legal protections required to conclude a deal will change.
We take a holistic look at the current dealmaking landscape in the SS&C Intralinks Deal Flow Predictor for Q3 2020, a special issue with a view on what the next six months might look like for M&A.
The report contends that powerful systemic drivers of M&A dealmaking will reassert themselves once the exit path from the current crisis becomes clearer. This edition features discussions of two of those drivers: a spotlight on M&A shareholder activism, and an interview with Sen Zhang, director of global fund management at leading Chinese private equity firm JD Capital, on the state of private capital.
I invite you to download your copy here. Stay safe and be well.
Claudio Yamashita is a vice president at SS&C Intralinks and is responsible for sales and business development in Latin America. He has more than 15 years of experience in technology and collaboration solutions with global software companies such as Oracle, Ericsson and Amdocs. During his career, he has focused on empowering companies with cloud-enabled technologies and services to help organizations improve efficiency with high-level security.