The majority of UK corporates (71%) are optimistic about competing against private equity houses in the current M&A market, according to the Corporates: Maximising M&A survey, cond
The majority of UK corporates (71%) are optimistic about competing against private equity houses in the current M&A market, according to the Corporates: Maximising M&A survey, conducted for IntraLinks, an online workspace provider. The survey respondents were senior corporate executives involved in M&A transactions in the UK in the last twelve months.
Although Private Equity players are considered swifter dealmakers, UK corporates remain confident that they can continue to compete effectively in auction situations. The ability to use corporate synergies (44%) and an extensive market knowledge (37%) are given as main advantages corporate buyers have over private equity firms.
When it comes to sourcing M&A targets, UK corporates rely primarily on their financial advisers (58%). Other companies are the next leading source (38%) ahead of Private Equity (31%).
The use of in-house resources to find deals in conjunction with financial advisers appears to underline the more sophisticated approach to M&A adopted by many UK corporates. In terms of strategy, a third of respondents plan to conduct M&A at similar levels to 2006, while 13 per cent even claimed to increase their deal activity.
The IntraLinks M&A Insight reveals great optimism among UK corporate executives with 88% being bullish about deal activity in the next 12 months. US buyers are considered the most aggressive acquirers of UK assets, clearly ahead of Spanish (12%), French and German (6% each) firms.
This ties in with the results of the IntraLinks German Mid-Market Monitor published earlier this month, which also found the majority of M&A professionals predicting that deal activity will be dominated by US buyers with US private equity firms and corporates (39%) winning the largest part of German assets.
On the buy-side, access to information (59%) and transparency (19%) were identified as the biggest challenge facing due diligence, whilst the main sell-side concerns were confidentiality (25%) and timing (19%). Most Buy side respondents used VDR to enable due diligence (78%) compared with sell side respondents (43%), however this is dues to respondents having undertaken a significantly higher number of acquisitions than disposals in the last two years.
Respondents in particular appreciate the convenience, multiple usage and cost savings related to the use of virtual datarooms. The majority of respondents would use a VDR on any deal type, highlighting the confidence in the suitability of VDR to handle a range of M&A transactions.
