Europe Has Highest Volume of M&A Deals in the Pipeline
M&A activity in Europe is predicted to increase 14.4%, and 13.3% throughout the whole of EMEA, over the next six months compared to the same period last year, according to data from Intralinks, the global market
leader in virtual data rooms.
These rises mean EMEA is the top performing global region for expected M&A activity in the next six months, with the manufacturing/industrials, technology and consumer sectors dominating deal pipelines in Europe.
Intralinks reveals these findings as part of its latest Intralinks Deal Flow Predictor (DFP). The Intralinks DFP accurately forecasts the volume of future M&A announcements by tracking M&A deals that are in the preparation stage or have reached due diligence. On average, these deals are six months away from their public announcement. The Intralinks DFP has been independently verified as a reliable predictor of future M&A activity.
Although the overall outlook for EMEA is positive, increases in early-stage M&A activity in the UK - currently sitting at a 10% increase in volume on the same period last year - are more subdued compared to France, Germany and Spain. Uncertainty surrounding the outcome of the UK general election may have had an impact on UK dealmakers, who may have been taking a more cautious approach to M&A until the future political direction of the country was decided.
European M&A volumes will be boosted by a bullish deal environment in Germany, with early-stage M&A deal activity rising 26% compared to the same period last year. Germany is a significant driver of overall M&A activity in Europe, and it is likely that the EUR 60 billion per month quantitative easing (QE) programme recently started by the European Central Bank will have a positive impact on future dealmaking. According to 120 EMEA dealmakers surveyed by Intralinks in separate research, 67% of respondents expect an increase in European deals as a result of QE.
Alongside the DFP, Intralinks also revealed the findings from its Global Sentiment Survey that gauges opinion among 600 dealmakers on the future deal environment. Some of the key findings are:
European dealmakers think the most attractive acquisition targets are ‘Internet of things’ (33%) companies, whereas the global figures state that online businesses, mobile payments and analytics firms are more attractive (25%). Global dealmakers do not think Bitcoin/online currencies companies are attractive acquisition targets, with only 3% stating that this is the case.
European dealmakers are becoming increasingly optimistic that more deals will take place this year, with 76% stating that they expect deal volumes to increase, compared to 69% last quarter.
52% of European dealmakers expect the volume of outbound M&A activity from China to increase over the next 12 months – a much higher number than North American dealmakers, of which 31% believe that outbound activity to China will increase.
Other global highlights from the latest Intralinks DFP include:
At a global level, Intralinks forecasts modest growth in announced M&A deal volume through Q3 2015, compared to the same period last year. With an 11% increase in early-stage M&A activity, global M&A announcements will increase by around 6% in the first half of 2015 compared to 2014.
The US is also performing strongly, with high forecast growth.
North America shows robust growth in early-stage M&A activity of 13.2%, compared to last year. In the Asia Pacific region, a 4% increase in early-stage M&A activity over the last 12 months (LTM) indicates M&A levels should exceed last year, despite a slowing of economic growth in China and some weakness in Japan. With an 11% LTM decline in early-stage M&A activity, Latin America remains subdued as the impact of falling commodity prices and a sharp slowdown in the region’s largest economy, Brazil, is being felt.
Telecommunications, Media & Entertainment (TME), Consumer, Technology and Manufacturing/Industrials lead activity. Globally, on an industry level, we are seeing the strongest increases in early-stage M&A activity in the Telecommunications, Media & Entertainment (TME), Consumer, Technology and Manufacturing/Industrial sectors.
About the DFP
The Intralinks DFP tracks early-stage M&A deals (sell-side M&A transactions that are in the preparation stage or that have reached the due diligence stage) across the world, on average six months prior to their public announcement. Intralinks is the leading global provider of virtual data rooms. Its involvement in the early stages of a significant percentage of the world’s M&A transactions gives the company a distinctive view into the expected volume of future M&A deal announcements.
The Intralinks DFP has been independently verified as an accurate predictor of future changes in the number of announced global M&A transactions, with quarter-on-quarter (QoQ) percentage changes in the Intralinks DFP typically being reflected on average six months later in announced deal volumes, as reported by Thomson Reuters.
About Intralinks Dealspace
Intralinks is a leading supplier of solutions for managing strategic transactions. Intralinks Dealspace, the market leading virtual data room (VDR), gives M&A professionals a complete solution to manage the full lifecycle of a deal. Intralinks Dealspace supports every step of the deal process, enabling deal teams to securely exchange data with buyers, sellers and advisors, helping speed strategic transactions such as mergers, acquisitions, divestitures, capital raises and corporate restructurings.