New York, NY, October 22, 2015 — The Intralinks Deal Flow Predictor (DFP), an indicator of future mergers and acquisitions (M&A) announcements with a proven track record for accuracy, forecasts modest growth for the volume of global M&A deals announced through the first quarter of 2016. M&A volumes are predicted to increase by about seven percent through the first quarter of 2016 compared to 2015. The sectors predicted to have the most growth are consumer, healthcare, high-technology, and real estate, while the energy & power, industrials, and telecom sectors will see a decrease.
“2016 is shaping up to have a modest, but good start for global M&A deal announcements, coming off of what we’re predicting to be a record breaking year in 2015,” said Matt Porzio, vice president of M&A strategy and product marketing at Intralinks. “Based on our insights into early-stage M&A activity, we are predicting modest global growth due to uncertainty in North America over interest rates and the economic slowdown in China. Latin America appears to be staging a recovery, showing the highest increase in M&A activity in more than 18 months.”
While Intralinks predicts that 2015 will be a new record year for global M&A announcements, dealmaking confidence for 2016 appears to have weakened in North America (NA) and Asia Pacific (APAC) driven by concerns over a China-driven global economic slowdown, fears of a further correction in global equity markets and confusion among dealmakers over the pace and timing of expected U.S. interest rate rises.
Latin America (LATAM) stands out the most, with early stage M&A activity growing nearly 49 percent. Early-stage deal activity in Europe, Middle East and Africa (EMEA) has accelerated, growing by 11 percent, compared to nearly seven percent in the previous quarter. APAC has shown only a small increase in early-stage M&A activity with growth of about three percent, reflecting fears of a Chinese economic slowdown and the turmoil in Chinese and emerging market equities over the summer. NA saw a reduction in early-stage M&A activity of three percent, due to fears over a slowing U.S. and global economy and confusion among dealmakers over the pace and timing of likely future interest rate increases by the U.S. Federal Reserve.
The Intralinks DFP forecasts the volume of future M&A deal announcements by tracking the number of early-stage M&A deals that are in preparation or have reached the due diligence stage. On average, these deals are six months away from their public announcement. The Intralinks DFP has been independently verified as an accurate predictor of the number of future M&A deal announcements.
The Intralinks DFP’s findings are consistent with the responses to Intralinks’ latest quarterly Global M&A Sentiment Survey, which polled M&A dealmakers in early October and involved responses from a total of 575 M&A professionals. The survey’s findings included the following:
- Globally, the percentage of dealmakers who are optimistic about the current deal environment fell to 43 percent compared to 51 percent in the previous quarter’s survey. This is the lowest level since we first launched this survey in Q4 2013 and the first time that the percentage of optimistic respondents has fallen below 50 percent.
- In response to three key questions asking about optimism, expected deal participation, and general deal volumes, dealmakers in EMEA were the most positive, with a combined 57 percent, and dealmakers in NA were the least positive with a combined 48% (the figures for APAC and LATAM were a combined 54 percent and 50 percent, respectively).
- Respondents in all regions except LATAM expected a global economic slowdown to have the most impact on M&A activity over the next 12 months. Dealmakers in LATAM, however, expected monetary policy (i.e., quantitative easing and rising interest rates) to have the most impact on M&A activity in their region over the next 12 months.
- Dealmakers in APAC and LATAM were the most concerned about a slowdown in Chinese economic growth having an impact on M&A activity in their region over the next six months, with 67 percent and 77 percent, respectively, compared to 51 percent and 46 percent, respectively, in NA and EMEA.
About the Intralinks Deal Flow Predictor
The Intralinks Deal Flow Predictor provides Intralinks' perspective on the level of M&A due diligence activity taking place during any given period of time. The statistics contained in the Intralinks DFP represent the volume of VDRs opened, or proposed to be opened, through Intralinks or other providers for the purpose of conducting due diligence on proposed transactions including asset sales, divestitures, private placements, financings, capital raises, joint ventures and partnerships. These statistics are not adjusted for changes in Intralinks' share of the VDR market or changes in market demand for VDR services. These statistics may not correlate to the volume of completed transactions that may be reported by market data providers and should not be construed to represent the volume of transactions that will ultimately be consummated during any period of time. Indications of future completed deal activity derived from the Intralinks DFP are based on assumed rates of deals going from due diligence stage to completion. In addition, the statistics reported by market data providers may be compiled with a different set of transaction types than those set forth above.
THIS PRESS RELEASE AND THE INTRALINKS DFP (COLLECTIVELY THE "MATERIALS") ARE PROVIDED "AS IS" FOR INFORMATIONAL PURPOSES ONLY. INTRALINKS MAKES NO GUARANTEE, REPRESENTATION OR WARRANTY OF ANY KIND REGARDING THE TIMELINESS, ACCURACY OR COMPLETENESS OF THE CONTENT OF THE MATERIALS. THESE MATERIALS ARE BASED ON INTRALINKS' OBSERVATIONS AND SUBJECTIVE INTERPRETATIONS OF DUE DILIGENCE ACTIVITY TAKING PLACE, OR PROPOSED TO TAKE PLACE, ON INTRALINKS' OR OTHER PROVIDERS' VDR PLATFORMS FOR A LIMITED SET OF TRANSACTION TYPES. THESE MATERIALS ARE NOT INTENDED TO BE AN INDICATOR OF INTRALINKS' BUSINESS PERFORMANCE OR OPERATING RESULTS FOR ANY PRIOR, CURRENT OR FUTURE PERIOD, NOR ARE THESE MATERIALS INTENDED TO PROMISE, GUARANTEE OR ASSURE FUTURE LEVELS OF COMPLETED DEAL ACTIVITY. THESE MATERIALS ARE NOT INTENDED TO CONVEY INVESTMENT ADVICE OR SOLICIT INVESTMENTS OF ANY KIND WHATSOEVER.
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