Intralinks’ Q3 2013 Deal Flow Indicator (DFI) predicts an 18 per cent increase in year-over-year early-stage global M&A activity in early 2014, with particularly strong performance in Europe, Middle East and Africa (EMEA) and Latin America.
With overall deal flow only slightly below the record level seen in the previous report, indications are there is a sustained recovery underway in the global M&A market.
“We expect the growth in global M&A activity to continue unabated into 2014,” says Matt Porzio, vice president, M&A strategy and product marketing at Intralinks. “The DFI data indicates year-over-year growth in all geographies, with EMEA showing a dramatic 35 per cent rise in deal activity, spurred by a strong performance across Europe. We usually see a seasonal dip in M&A activity in the third quarter data, but 2013 is proving to be a year of sustained growth, and 2014 looks set for a strong start.”
In a separate survey of 2,400 global M&A professionals conducted in September, 2013, 67 per cent of buy-side professionals and 75 per cent of sell-side professionals reported expecting overall deal volumes to increase over the next 12 months, reinforcing the view that global M&A markets will continue to be very active.
The Intralinks DFI tracks global sell-side mandates and deals reaching due diligence prior to public announcement. The DFI is based on the company’s insight into a significant percentage of early-stage M&A transactions.
The Q3 2013 Intralinks DFI also shows that despite some political and economic uncertainty in the US, North America showed a seven per cent year-over-year increase in M&A activity. The quarter-over-quarter decrease of eight per cent followed an exceptionally strong previous quarter. A spate of large, international deals in Q3 will likely continue through the rest of this year, driven by the US. While an ongoing US budget impasse will likely not suppress M&A activity, a failure by the US Congress to approve raising the debt ceiling would likely have profound negative consequences for global deal activity.
Europe drove a spectacular 35 per cent jump in EMEA year-over-year deal activity, with quarter-over-quarter growth up one per cent following a strong previous quarter. All regions of EMEA showed double digit year-over-year gains, with particularly strong contributions from Germany, France, Benelux and Spain.
Latin America deal volume grew by 21 per cent year-over-year (two per cent quarter-over-quarter), while Asia Pacific grew nine per cent year-over-year (down three per cent quarter-over-quarter). In both markets local deal activity more than made up for a lowering of activity from large foreign corporates.
