2017年-_OZ794~A

M&A Trends 2018 Summary

Core Content

This report provides an overview of the state of merger and acquisition (M&A) activity in 2018, based on a survey of over 1,000 executives from corporations and private equity firms. The key themes include increased deal activity, strategic shifts in M&A motivations, the use of technology tools, and challenges such as regulatory uncertainty and market volatility.

Main Points

• Deal Activity Increase:

  • 68% of US-headquartered corporate executives and 76% of private equity leaders expect an increase in the number of M&A deals in the next 12 months.
  • Most respondents anticipate that deal size will either increase or remain the same compared to 2017.

• Strategic Drivers:

  • Technology acquisition is now the top driver of M&A activity, with 20% of respondents citing it as the main reason.
  • Expanding customer base in existing markets and diversifying products or services follow closely, at 19% and 16%, respectively.
  • Digital strategy and talent acquisition are also significant, with 12% and 9% of respondents citing them as key motivations.
  • Interest in bargain-priced assets and entry into new geographic markets has decreased.

• Deal Success:

  • There has been a notable improvement in deal success rates, with only 12% of corporate respondents and 6% of private equity respondents reporting that a majority of their deals have not met expectations.
  • The use of non-spreadsheet M&A technology tools is becoming more common, with 63% of respondents incorporating these tools to improve integration, reduce costs, and shorten deal timelines.

• Deal Characteristics:

  • Deal size: 63% expect larger deals in 2018.
  • Deal volume: Larger firms are more likely to increase deal activity, with 35% of corporations with over $1 billion in revenue and 29% of private equity firms with over $1 billion in investments expecting to do more deals.
  • Deal type: Technology acquisition and digital strategy are leading motivations, while divestitures are also on the rise, with 70% of respondents planning to sell assets or units.

• Headwinds and Obstacles:

  • Global economic uncertainty remains the top concern (20%), though it has decreased from previous years.
  • Capital market volatility and deal valuation are also concerns, with 17% and 15% of respondents citing them, respectively.
  • Interest rate concerns have dropped significantly to 11%.
  • Delayed legislation is a growing concern, with 1 in 8 respondents citing it as a potential obstacle.

• Industry Convergence:

  • Vertical integration and related industries are the main themes of convergence.
  • Top industries expected to converge include life sciences and health care, technology, financial services, energy and construction, construction and manufacturing, retail and technology, and telecommunications and technology.
  • Drivers of convergence include costs of technology and compliance, margin pressure, and regulatory changes.

• Looking Abroad:

  • US-based investors remain interested in international deals, though interest in Asia (China and Japan) has declined.
  • Central America and Australia have become more attractive, with increased interest compared to the previous year.
  • Canada and the UK continue to be top foreign targets, while interest in Germany, Italy, and Spain has declined.

• Deal Spending Firepower:

  • Cash reserves have increased for 65% of corporate respondents over the past two years.
  • M&A is the primary intended use of this cash, with 40% of respondents citing it as their number one priority.
  • Organic investments and stock buybacks are also important, but less so than M&A.

Key Information

• Survey Methodology: Conducted between September 6 and 24, 2017, by OnResearch, the survey included 1,016 executives: 766 from US-headquartered corporations and 250 from domestic-based private equity firms.
• Respondent Background: All participants are senior executives (director-level or higher) involved in M&A activities, with companies and funds having annual revenues of $10 million or more.
• Trends:
  • A shift in focus from global deals to domestic and regional deals.
  • A decline in interest in Asia and a rise in interest in Central America and Australia.
  • Technology is the leading strategic driver, followed by expanding customer bases and product diversification.
  • Divestitures are expected to remain a major focus, with 70% of respondents planning to sell assets or units.

Conclusion

The M&A landscape in 2018 is expected to be more active and successful, driven by strategic priorities such as technology acquisition and digital strategy. The use of new diagnostic and integration tools is helping to improve deal outcomes, while macroeconomic concerns and regulatory uncertainty continue to pose challenges. Corporations and private equity firms are showing a renewed focus on M&A as a core strategy, with increased spending firepower and a shift in geographic and sectoral interests.