In LATAM, M&A Adapts Beyond Crisis in Q4 2020
Pandemic-related stalls of physical audits along with the ability to make secure revenue projections are hindering valuations.
1 September 2020
LATAM is facing a downturn, according to our newly published SS&C Intralinks Deal Flow Predictor for Q4 2020.
The number of new mergers & acquisitions (M&A) deals for Q4 2020 is predicted to drop by 2 percent YOY (range of +5 to -9 percent). Yet, some hints of optimism prevail, with July showing a slight rebound in new deals since the start of the COVID-19 crisis.
The leaders in announcements in LATAM are Materials, Industrials and Energy. Yet we’re keeping an eye on Technology, Financial and Insurance, Real Estate and Consumer Goods to bud. In pandemic-struck Aviation and Retail, restructuring deals have become fuel for increased Distressed M&A announcements.
To no surprise, two important LATAM economies, Mexico and Chile, were the only ones to remain strong throughout the pandemic (unlike Brazil). Chile is looking at a double-digit increase for Q4. Hopefully, Brazil will see M&A growth once more companies become public and increased IPOs drive funding.
All in all, the deal pipeline is growing for the second half in LATAM. However, pandemic-related stalls of physical audits (e.g. plant inspections) along with the ability to make secure revenue projections are hindering valuations. Until then, technology is filling a void in other places by enhancing due diligence.
The need for networking and building a pipeline of deals remains vital for all professionals as part of this community; social distancing and lockdowns are certainly limiting the ability to originate — and win— new mandates. In that sense, technology and the capability to source and originate new conversations virtually are, right now, critical.
Along with our forecast of M&A activity for the next six months, the latest issue of SS&C Intralinks Deal Flow Predictor includes:
- Spotlight feature: Are we in an epidemic of disputes? Read about the effects of COVID-19 on MAE/MAC clauses — and how to navigate them in a new M&A environment.
- An interview with Blair Nimmo, partner, UK Head of Restructuring and Global Head of Insolvency, at global accountancy and financial advisory firm KPMG, about the challenges his clients are facing, the role of technology in the age of remote work and his view on M&A, restructurings and insolvencies.
- An in-depth special report, Global M&A Catches Its Breath in an Uncertain Market, featuring regional spotlights using data provided by PitchBook.
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.