ISSUE 4 | 2021
WELCOME WELCOME TOTHE FINAL EDITIONOF HORIZONS IN 2021, INWHICH BDO M&A PROFESSIONALS AROUNDTHEWORLD PRESENT THEIR INSIGHTS ON MIDMARKET DEAL ACTIVITY ANDTRENDS
we examine why data remains at the core of Industry 4.0 M&A. Manufacturing technology companies are increasing the pace of digitisation and M&A activity in this area is robust. In addition, M&A recovery is set to continue with renewables deals in the natural resources industry. Awareness of the environment and emphasis on ESG has directed attention to this sub-sector. Whilst the pandemic remains a major issue in many countries around the world, businesses and investors have continued to adapt and rethink their businesses. M&A has prospered and
Corporates are continuing to pursue non-core disposals to simplify their businesses or evolve their portfolio of activities and locations. Private equity are taking the opportunity to realise investments while trading, buyer appetite and prices are strong. We look at the trends above in more detail in our Global View article. In our leader articles we look at cyber risk and ask if it is time for it to be recognised in a more central role in deal making? We also look at the “Path Ahead” in terms of the trends in analyst earnings estimates, where we see a narrowing in most industries. We ask if there are potential explanations for the disconnect between forecasted fundamentals and equity prices? In our sector view, we look at Real Estate, TMT and Natural Resources. With Real Estate, we look at the main drivers in post-covid real estate investment, where the appetite remains strong. In the TMT,
The third quarter of 2021 saw a slight pause for breath in deal activity but still recorded a very respectable deal activity on a par with pre-pandemic levels. This pause was more noticeable with trade buyers, while private equity carried on investing at record levels. Private equity investors now represent over 25%of global mid-market deals and over 30%of aggregate deal value. Average deal value also continues to be at a record level and we believe this reflects the amount of cash chasing deals and the strong multiples being paid. We do not see any major reason for this picture to change as we head in the final quarter of the year. Sellers have come from all three categories of private owners, corporate and private equity. Many private owners are aiming to beat possible capital gains tax rises ahead of next year or to de-risk after managing through the pandemic.
seems set to continue to do so. We wish you well in closing the
transactions you are working on ahead of the end of the year and hope you stay safe and well.
SUSANA BOO INTERNATIONAL CORPORATE FINANCE COORDINATOR
JOHN STEPHAN HEAD OF GLOBAL M&A
john.stephan@bdo.co.uk
susana.boo@bdo.co.uk
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