Global M&A Dealmakers Cautiously Optimistic On 2024: Sentiment Report
- Expectations of increased M&A activity over the next 12 months, with Asia-Pacific respondents being the most optimistic.
- Challenges expected in financing conditions, with 71% of respondents foreseeing more difficult conditions.
- 84% of respondents anticipate an increase in ESG regulation next year.
- Focus on utilizing AI tools to enhance decision-making and operational efficiencies, with over 90% of respondents expecting an increase in their usage.
- Importance of starting deal preparation earlier and utilizing technology platforms for information governance and speed.
- Cybersecurity concerns on the rise, with over half of respondents experiencing concerns last year and 60% expecting an increase in the coming months.
- None.
Insights
The survey conducted by SS&C Intralinks provides a valuable temperature check on the global M&A landscape. The expectation of increased M&A activity, particularly in the Asia-Pacific region, suggests a dynamic market with potential for growth. This could indicate a strategic shift for companies looking to expand or consolidate in this region, which may lead to increased investor interest in companies operating within these markets.
However, the anticipation of more challenging financing conditions points to a need for robust financial planning and risk assessment. Companies and investors alike should prepare for tighter credit markets, possibly leading to more selective deal-making and potentially higher costs for capital. This could affect the valuation of deals and the structure of financing, with possible implications for stock performance of companies involved in M&A activities.
The survey's findings underscore the importance of ESG regulation in the M&A process, with a significant majority of respondents expecting an increase in ESG regulation next year. This trend suggests that companies with strong ESG frameworks may be more attractive acquisition targets or partners. Investors should monitor ESG performance as a key metric in evaluating potential investments, as it may impact the long-term sustainability and regulatory compliance of the entities involved.
With the expected rise in the use of AI tools and technology platforms for improving information governance, there is potential for increased efficiency and reduced costs in the M&A process. This could lead to improved margins and operational performance, which may be reflected in the financial statements and ultimately, the stock price of companies engaging in M&A.
The reported cybersecurity concerns and the anticipated increase in such issues highlight the critical role of cybersecurity in today's M&A landscape. As dealmakers rely more on virtual data rooms and technology platforms, the risk of data breaches and cyber-attacks becomes more pronounced. Investors should consider the cybersecurity posture of companies they invest in, particularly those involved in M&A, as cybersecurity incidents can lead to significant financial and reputational damage, impacting stock market performance.
Companies that invest in robust cybersecurity measures may mitigate these risks and potentially gain a competitive advantage in the deal-making process. This could translate into investor confidence and a positive impact on the company's market valuation.
SS&C survey of 300 global M&A professionals signals dealmakers see opportunity in an uncertain environment
"Despite the continued perception of tough financing conditions and a difficult dealmaking environment, the market is cautiously optimistic," said Bob Petrocchi, Co-Head of SS&C Intralinks. "M&A professionals believe opportunities are there and likely to grow. To ensure those deals get done, firms are adjusting their strategies to start deal preparation earlier and leverage technology to improve transparency, quality and speed of the dealmaking process."
Key findings from the report include:
- Half of the respondents expect overall levels of M&A activity to increase somewhat over the next 12 months;
Asia-Pacific respondents are most optimistic. 71% believe financing conditions will be more challenging over the next 12 months. A third of respondents believe financing will be the most challenging part of the M&A process.84% of respondents believe ESG regulation will increase next year.
The report also highlights areas of focus for M&A dealmakers in the coming year:
- More than
90% of respondents expect the use of AI tools to increase this year as dealmakers seek to enhance decision-making and operational efficiencies. 34% of respondents said starting deal preparation earlier will be critical over the next 12 months, while nearly a third said using technology platforms to improve information governance and speed will be most important.- More than half of respondents experienced cybersecurity concerns last year, and
60% expect those concerns to increase in the coming months.
Click here to read the full report.
SS&C Intralinks is a pioneer of the virtual data room, delivering software-enabled services across the entire deal lifecycle, including deal marketing, deal prep, due diligence, insights and post-merger integration. Intralinks technology enables and secures the flow of information by facilitating M&A, capital raising and investor reporting. SS&C Intralinks has executed more than USD 35 trillion worth of financial transactions on its platform.
About SS&C Technologies
SS&C is a global provider of services and software for the financial services and healthcare industries. Founded in 1986, SS&C is headquartered in
Additional information about SS&C (Nasdaq: SSNC) is available at www.ssctech.com.
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SOURCE SS&C
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