Worldwide M&A activity predicted to accelerate over the next six months
- Year-over-year growth in worldwide M&A announcements predicted to tick up to 8% in Q2-Q3 2018 from 5% in Q1 2018
- Asia-Pacific region dominates growth in M&A activity
- Despite positive momentum, near-term risks of an M&A market correction are increasing
LONDON, UK, MAY 10, 2018 — The Intralinks Deal Flow Predictor, an indicator of future mergers and acquisitions (M&A) announcements with a proven track record for accuracy, forecasts that the worldwide number of announced deals will increase by 8% year-over-year (YOY) during Q2-Q3 2018. The strongest growth in worldwide deal announcements is expected to come from the industrials, TMT (technology, media and telecoms) and real estate sectors. Growth in M&A activity is not evenly spread, however, with the Asia-Pacific (APAC) region dominating the growth forecast: 73% of the forecast increase in announced deals over the next two quarters is expected to come from APAC.
“The strongest global economic growth since 2011, low inflation, low interest rates, ready availability of acquisition financing, record amounts of private equity capital and deal-hungry corporate acquirers are combining to drive global M&A activity to new highs”, said Philip Whitchelo, Intralinks’ vice president for strategic business development. He goes on to caution that, “Despite such positive underpinnings, we believe that the near-term risks of an M&A market correction are increasing: the M&A market is in the fifth year of its current up-cycle; valuations are at record highs and 23% above their 25-year average; global equity markets are down 7% since their January 2018 peak; there is a growing backlash against cross-border Asian acquirers in the US, Germany, the UK and Australia; and global trade is under threat from economic nationalism, protectionism and the unwinding of cross-border economic integration, examples being actual and threatened trade tariff barriers in the US and China, Brexit and the renegotiation of the North American Free Trade Agreement.”
The Intralinks Deal Flow Predictor forecasts the number of future M&A announcements by tracking early-stage M&A activity - new sell side M&A transactions that are in preparation or have begun their due diligence stage. These early-stage deals are, on average, six months away from their public announcement.
In Asia Pacific, the number of announced M&A deals is predicted to increase by around 19% YOY during Q2-Q3 2018, within a range of 11% to 27%, led by the industrials, energy & power and TMT sectors. Within APAC, all regions are showing double-digit increases in their volumes of early-stage M&A activity, with North Asia (China, South Korea), Japan and Australia expected to make the strongest contributions to APAC’s growth.
In Europe, the Middle East and Africa the number of announced M&A deals is predicted to increase by around 5% YOY during Q2-Q3 2018, within a range of 0% to 10%. The strongest contributions to EMEA’s growth are expected to come from Eastern Europe, Sub-Saharan Africa and Northern Europe, as well as the materials, real estate and industrials sectors.
In Latin America, the number of announced M&A deals is predicted to increase by around 5% YOY during Q2-Q3 2018, within a range of -10% to 18%, led by the energy & power and financials sectors in Mexico, Peru and Argentina.
In North America, the number of announced M&A deals is predicted to increase by around 2% YOY during Q2-Q3 2018, within a range of -5% to 10%, led by the TMT, real estate and industrials sectors.
About the Intralinks Deal Flow Predictor
The Intralinks Deal Flow Predictor has been independently verified as an accurate predictor of future changes in the number of worldwide announced M&A transactions, as reported by M&A data providers such as Thomson Reuters.
The Intralinks Deal Flow Predictor provides Intralinks’ perspective on the level of early-stage M&A activity taking place worldwide during any given period. The statistics contained in this report reflect the volume of virtual data rooms (VDRs) opened, or proposed to be opened, through Intralinks and other providers for conducting due diligence on proposed transactions, including asset sales, divestitures, equity private placements, financings, capital raises, joint ventures, alliances 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 reported by market data providers and should not be construed to represent the volume of transactions that will ultimately be consummated during any period nor of the revenue or M&A deal volume that Intralinks may generate for any financial period. Indications of future completed deal activity derived from the Intralinks Deal Flow Predictor are based on assumed rates of deals going from due diligence stage to completion. In addition, the statistics provided by market data providers regarding announced M&A transactions may be compiled with a different set of transaction types than those set forth above.
THIS PRESS RELEASE AND THE INTRALINKS DEAL FLOW PREDICTOR (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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Intralinks is a leading financial technology provider for the global banking, dealmaking and capital markets communities. As pioneers of the virtual data room, our technology enables and secures the flow of information, empowering our customers to work more productively and with complete confidence. Intralinks facilitates strategic initiatives such as mergers and acquisitions, capital raising and investor reporting. Our solutions enhance these activities by streamlining operations, reducing risk, improving client experiences and increasing visibility. We’ve earned the trust and business of more than 99 percent of the Fortune 1000 and have executed over $34.7 trillion worth of financial transactions on our platform. For more information, visit www.intralinks.com.
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