The IntraLinks Deal Flow Indicator (DFI), which tracks global sell-side merger and acquisition (M&A) mandates and deals reaching the due diligence stage prior to public announcement, shows an overall decrease of two per cent between Q3 and Q4 2012.
EMEA and Latin America showed increases (13 per cent and 19 per cent respectively), while North America dropped 13 per cent and Asia Pacific decreased 16 per cent.
At the close of 2012, optimism returned to the M&A climate. The Q2 2012 DFI anticipated that dealmaking would see an increase several months down the line, as early-stage M&A had risen dramatically. In Q4 2012, those predictions were realised, with an eight per cent increase in announced M&A over Q4 2011. The DFI projects additional growth in the next several months.
Despite varied quarter on quarter numbers compared to Q4 2012, the DFI showed an 11 per cent increase in M&A deal activity year-on-year. Most regions also showed a positive trend for Q4 2012 over Q4 2011 except North America, which dropped five per cent. Latin American showed the strongest growth (31 per cent), with similarly positive trends in Europe/Middle East/Africa (EMEA) (26 per cent), and Asia Pacific (21 per cent).
"This quarter has seen its share of distress-driven deals, but has equally witnessed the return of large-cap deals motivated by consolidation, geographical expansion, and opportunity," says Matt Porzio, vice president, M&A product marketing at IntraLinks. "Dealmakers are back at negotiating tables at the start of 2013, although they are still proceeding with caution. Economic woes are far from gone, and there is a very real chance that the climate may once again change. The market rushed into deals in Q2 2012 and that has been followed by several quarters of varied deal volume. Inorganic growth is an increasingly popular option for corporates and private equity firms must continue their investment cycles, and while we’re optimistic given the newfound stability, it may result in slower growth until the second half of 2013."
IntraLinks’ Deal Flow Indicator results are based on the company’s involvement in a significant percentage of M&A deals in the early stages of each transaction, providing a leading perspective on global deal activity.
