SS&C Intralinks Sees M&A Deal Flow Holding Steady in Q1 2024

Rhea-AI Summary

SS&C Technologies Holdings, Inc. (Nasdaq: SSNC) predicts steady global and regional mergers and acquisitions (M&A) volume for Q1 2024, with marginal risk of decline. Geopolitical risks dampen volume outside of North America. Ken Bisconti, Co-Head of SS&C Intralinks, states that deal flow has remained stable over the last three years.

Insights

Market Research Analyst

With the release of SS&C Technologies Holdings' Q1 2024 predictions on mergers and acquisitions (M&A), it's clear that market dynamics are heavily influenced by geopolitical tensions. Historically, M&A activity is a strong indicator of corporate confidence and economic health. A steady deal flow, despite external pressures, suggests that businesses are adapting to a new normal where geopolitical risks are an ongoing concern.

From a market research perspective, the resilience in M&A activity could point to robust due diligence processes and risk mitigation strategies that companies are employing. Investors may view this stability as a sign of underlying strength in the market, potentially leading to increased confidence in sectors that continue to engage in M&A despite global uncertainties.

It is important to note that while SS&C's report indicates stability, the 'marginal risk of decline' should not be overlooked. This implies that while the overall picture is optimistic, there are underlying vulnerabilities that could affect future M&A volumes, possibly impacting market valuations of companies in sectors that are typically M&A-intensive.

Financial Analyst

SS&C's Deal Flow Predictor serves as a forward-looking indicator for investors, providing insights into the potential pipeline of M&A transactions. A stable M&A environment can lead to positive market reactions, as these activities can create value through synergies, economies of scale and enhanced market positioning. However, the mention of geopolitical risks as a dampening factor cannot be ignored.

Investors should consider the implications of these risks on deal-making, particularly in regions outside North America. Geopolitical instability can lead to currency fluctuations, regulatory changes and shifts in investor sentiment, all of which can impact the valuation and execution of cross-border transactions.

For stakeholders, the short-term implications may include heightened due diligence and potentially more conservative valuations to account for increased risk. In the long-term, companies that navigate these risks successfully could emerge stronger, with a more diversified and resilient business model. The key takeaway for the financial community is to closely monitor geopolitical developments and their potential impact on M&A activity, as they can significantly influence investment decisions and market trends.

Economist

The mention of geopolitical risks in SS&C's Deal Flow Predictor underscores the intricate relationship between international affairs and economic activity. M&A transactions are not only business decisions but also reflect the broader economic environment. A steady volume of M&A activity in the face of geopolitical tensions indicates a degree of economic resilience, as firms continue to seek growth through acquisitions despite potential headwinds.

Geopolitical tensions can affect trade policies, supply chains and access to capital, all of which are crucial factors for M&A success. The ability of firms to maintain deal flow suggests that businesses may be finding ways to hedge against these risks, possibly by diversifying their operations or seeking deals within more politically stable regions.

For the broader economy, sustained M&A activity can signal continued investment and a willingness to pursue long-term strategies, which is essential for economic growth. However, the 'marginal risk of decline' serves as a cautionary note, indicating that businesses and investors should remain vigilant and responsive to changes in the geopolitical landscape, as these can swiftly alter market dynamics and economic forecasts.

Geopolitical risks dampen volume outside of North America

WINDSOR, Conn., Jan. 10, 2024 /PRNewswire/ -- SS&C Technologies Holdings, Inc. (Nasdaq: SSNC) today announced Q1 2024 global and regional predictions from the SS&C Intralinks Deal Flow Predictor, a quarterly publication of future mergers and acquisitions (M&A) announcements.

"Mergers and acquisitions activity encountered seasonal and market challenges at the start of Q3 2023 but recovered by the end of the year," said Ken Bisconti, Co-Head of SS&C Intralinks. "Based on pre-announced deal flow, we expect Q1 2024 volume to hold steady, with marginal risk of decline. We have seen deal flow remain remarkably stable over the last three years and are optimistic about M&A activity in H1 2024."   

Regional market forecasts for Q1 2024 M&A activity:

• Globally, M&A volumes are expected to be flat in all regions except North America. We are forecasting a neutral outlook for global Q1 2024 volume, with nominal risk of decline.
• Asia Pacific saw declines in dealmaking in the second half of 2023, but ended the year on an upward trajectory. There are several sectors poised to outperform in the next quarter, including the Technology sector in China, Banking and Energy in India, and Biotech in Japan and South Korea.
• Europe, the Middle East and Africa experienced a number of stressors in Q3 2023, but rebounded closer to Q4. Sectors showing signs of strength on a QoQ and QoQY basis include Telecom in France, Electronics and Finance in the Netherlands and Insurance in South Africa, with the U.K. expected to perform strongly overall. 
• Latin America saw a dip in volume in Q3 2023, followed by a strong rebound in Q4. The potential conflict between Venezuela and Guyana presents downside risks, as it could involve Brazil, the region's largest economy.   
• North America experienced peak pre-announced deal volume in August and the highest regional deal flow in October since 2021. We are cautiously optimistic upward trends will continue throughout 2024, driven by a rebound in U.S. equities and the prospect of interest rates flattening.    

The SS&C Intralinks Deal Flow Predictor forecasts the number of future M&A announcements by tracking early-stage M&A activity from the previous four quarters, defined as new sell-side M&A transactions that are in preparation or have begun their due diligence stage. On average, early-stage deals are six months away from public announcement.

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 Windsor, Connecticut, and has offices around the world. Some 20,000 financial services and healthcare organizations, from the world's largest companies to small and mid-market firms, rely on SS&C for expertise, scale and technology.

Additional information about
SS&C (Nasdaq: SSNC) is available at www.ssctech.com.

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SOURCE SS&C

FAQ

What did SS&C Technologies Holdings, Inc. (Nasdaq: SSNC) announce?

SS&C Technologies Holdings, Inc. announced Q1 2024 global and regional predictions from the SS&C Intralinks Deal Flow Predictor.

What is the SS&C Intralinks Deal Flow Predictor?

The SS&C Intralinks Deal Flow Predictor is a quarterly publication of future mergers and acquisitions (M&A) announcements.

Who is Ken Bisconti?

Ken Bisconti is the Co-Head of SS&C Intralinks.

What are the Q1 2024 predictions for global and regional mergers and acquisitions (M&A) volume?

The predictions indicate steady volume with marginal risk of decline.

What challenges did mergers and acquisitions activity face at the start of Q3 2023?

Mergers and acquisitions activity encountered seasonal and market challenges.

How has deal flow remained over the last three years?

Deal flow has remained remarkably stable over the last three years.

What is the impact of geopolitical risks on mergers and acquisitions volume?

Geopolitical risks dampen volume outside of North America.