Intralinks Deal Flow Indicator projects a 16 percent year-on-year increase in global deal activity
Intralinks® Holdings, Inc. (NYSE: IL), a leading, global SaaS provider of content management and collaboration solutions, announced today the release of the latest Intralinks Deal Flow Indicator™ (DFI), a unique predictor of future mergers and acquisitions (M&A) activity. Intralinks is also detailing results from a separate global survey they conducted that gauged sentiment on the future of the global M&A market.
The Intralinks DFI forecasts changes in the volume of global M&A deals that are expected to be announced in the next six months, or through the third quarter of 2014. The latest data, compiled through the end of March 2014, shows a 16 percent increase in year-on-year (YoY) early-stage global M&A activity, with particularly strong performance in Europe, Middle East and Africa (EMEA) and Asia Pacific. Overall, this quarter's Intralinks DFI points to sustained momentum in M&A activity in 2014, building on the strong levels of M&A activity seen in 2013.
"Global M&A markets are healthy, exhibiting high levels of activity and continued optimism among dealmakers," said Matt Porzio, vice president of M&A strategy and product marketing at Intralinks. "Many factors are driving a highly competitive market, including a good lending environment and the fact that corporations and private equity need to put their money to work and buy growth. Deal volumes across the value chain are up and we expect to see more high profile deal announcements through 2014, especially in hot sectors like technology, telecommunication, media and entertainment and consumer products."
Intralinks Deal Flow Indicator Highlights – Outlook for Q3 2014
The Intralinks DFI tracks global M&A sell-side mandates and deals reaching due diligence prior to public announcement, providing a predictor of future global M&A activity levels. The Intralinks DFI is based on Intralinks' insight into a significant percentage of early-stage M&A transactions. Independent research shows that the Intralinks DFI is a reliable predictor of future changes in the number of announced M&A transactions, with percentage changes in the Intralinks DFI typically being reflected in announced deal volumes approximately six months later. Highlights from the latest Intralinks DFI include:
North America
The level of North American early-stage M&A activity grew 11 percent YoY, sustaining some of the momentum in this market from 2013. While deal volume was down 6 percent quarter-on-quarter (QoQ), this is largely a seasonal effect and the US market remains strong.
Europe, Middle East and Africa (EMEA)
Europe continues to perform strongly and consistently, with a 21 percent YoY increase, paired with a 5 percent increase QoQ. Regional instability and concerns about the crisis in Ukraine are not dampening enthusiasm and are not expected to impact M&A activity, according to our Global Sentiment Survey, which is described in greater detail below.
Emerging Markets
Latin America deal volume increased 13 percent YoY, but was down 10 percent QoQ. In our Global Sentiment Survey, dealmakers in the region expressed reduced optimism about prospects for the second half of 2014. In contrast, deal activity levels in the Asia Pacific region jumped 18 percent YoY and 10 percent QoQ with no indications that the decelerating Chinese economy is impacting dealmaking.
Global Sentiment Survey
In March 2014, Intralinks conducted a survey of more than 1,000 global M&A professionals to gauge dealmakers' sentiments and views on the M&A market. Highlights of the survey include:
Overall, 63 percent of M&A professionals are optimistic about the current deal environment, consistent with reported sentiment from the last quarter
73 percent predict M&A activity will increase over the next six months, consistent with last quarter and with the Intralinks DFI data
North American respondents expressed the most optimism about future deal activity in 2014, with 70 percent expecting an increase. Latin America showed the most pessimism, with only 47 percent expecting increased deal activity through the remainder of the year.
Our survey showed that dealmakers have some emerging doubts regarding deal valuation, which survey respondents all agreed was the greatest impediment to getting deals done. German survey respondent expressed concerns about the impact of rising energy costs on manufacturing, with 53 percent of them citing this concern as a reason they consider Germany a less attractive M&A target for international investors. In addition, 63 percent of respondents in the UK stated that they expect the passage of the Scottish independence referendum would have a negative impact on M&A activity.
