Early-stage M&A Bounces back in Asia despite China Market Crisis
January 26 2016 - 8:00PM
Business Wire
Early-stage mergers & acquisitions (M&A) in many Asian
markets are showing strong growth when compared to the same period
last year, despite the slowing Chinese economy and volatile
currency and equity markets. This indicates that 1H 2016 will see a
rise in deal announcements in different Asian markets, compared to
1H 2015. This is according to the latest Intralinks® Deal Flow
Predictor (DFP) report released by Intralinks Holdings, Inc.
(NYSE:IL), the leading global provider of software and services for
managing M&A transactions. Meanwhile, in the wider Asia-Pacific
(APAC) region, Australia is suffering from negative growth, having
been hit by the drop in demand in the metals and mining sector –
often led by China.
The Intralinks DFP forecasts the volume of future M&A deal
announcements by tracking early-stage M&A activity - M&A
transactions across the world that are in the preparation stage or
have reached the due diligence stage. These early-stage deals are,
on average, six months away from their public
announcement.
The latest Intralinks DFP data shows a bounce back in
early-stage M&A activity in APAC in Q4 2015, following a sharp
slowdown in Q3 2015. Taken together, the early-stage data predicts
the following for M&A deal announcements over the next six
months (i.e., in 1H 2016):
- Japan and South East Asia appear to be
mostly unaffected by the market volatility and economic bad news
coming from China – early-stage M&A deal activity has increased
in these two regions by 55% and 11%, respectively, year-on-year,
indicating that continued strong growth in M&A deal
announcements can be expected in Q2 2016;
- North Asia and South Asia appear set
for an increase in deal announcements in Q2 2016, following a flat
or declining Q1 2016 – early-stage deal activity has increased in
these two regions by 21% and 14%, respectively, year-on-year;
- Australia, however, appears to be in
trouble, with early-stage M&A activity declining by 18%
year-on-year, indicating that 1H 2016 will see a fall in deal
announcements compared to 1H 2015. Dealmaking in Australia has
historically been skewed to the metals and mining sector and
heavily reliant on Chinese inbound M&A activity. A combination
of the steep falls in global commodities prices and a slowing
Chinese economy will, we believe, contribute to a decline in
Australian M&A deal announcements in 1H 2016.
Based on the latest Intralinks DFP data, in the APAC region the
High Technology, Media & Entertainment, Real Estate and
Healthcare sectors are expected to show the most activity in 1H
2016.
Philip Whitchelo, Vice President of Strategy & Product
Marketing at Intralinks, said: “In APAC, early-stage M&A data
paints a mixed picture with some regions and countries seemingly
unaffected by the economic slowdown in China and volatility. Japan
and South East Asia appear to be best placed to increase M&A
deal announcements in 1H 2016, whereas, Australia in particular,
appears to have been hit by the slowing Chinese economy and its
reduced demand for commodities. However, we would argue that when
looking at emerging markets such as APAC, investors will have to
reject short-term thinking and, instead, be willing to take a
long-term view if they are to ensure success. We could see evidence
of this in 1H 2016 as companies look to acquire assets by taking
advantage of valuation opportunities.”
Other DFP regional findings include:
- North America (NA) – 5.4%
year-on-year growth. A modest increase in M&A activity is
expected in the first half of 2016 as a result of the Federal
Reserve Bank taking a cautious approach to further interest rate
rises over the course of this year, continued steady US economic
growth, lower raw material and energy costs due to low oil prices
and a stronger dollar.
- Europe, the Middle East and Africa
(EMEA) - 11% year-on-year growth in early-stage M&A
activity, making EMEA the highest growing region. Geo-political
concerns largely have not affected M&A in the region.
- Latin America (LATAM) – 7.4%
growth indicating a renewed interest in the region from dealmakers,
even with the dire economic projections for Brazil.
To download the complete Intralinks DFP report or to learn more,
please visit our website.
The Intralinks DFP has been independently verified as a
statistically reliable predictor of the number of future deal
announcements.
About Intralinks
Intralinks Holdings, Inc. (NYSE:IL) is a leading, global
technology provider of secure enterprise content collaboration
solutions. Through innovative Software-as-a-Service solutions,
Intralinks software is designed to enable the exchange and control
of information between organizations securely and compliantly when
working through the firewall. More than 3.1 million professionals
at 99% of the Fortune 1000 companies have depended on Intralinks'
experience. With a track record of enabling high-stakes
transactions and business collaborations valued at more than $28.1
trillion, Intralinks is a trusted provider of easy-to-use,
enterprise strength, cloud-based collaboration solutions. For more
information, visit www.intralinks.com.
About the Intralinks Deal Flow Predictor
The Intralinks Deal Flow Predictor provides Intralinks'
perspective on the level of M&A due diligence activity taking
place during any given period of time. The statistics contained in
the Intralinks DFP represent the volume of VDRs opened, or proposed
to be opened, through Intralinks or other providers for the purpose
of conducting due diligence on proposed transactions including
asset sales, divestitures, private placements, financings, capital
raises, joint ventures and partnerships. These statistics are not
adjusted for changes in Intralinks' share of the VDR market or
changes in market demand for VDR services. These statistics may not
correlate to the volume of completed transactions that may be
reported by market data providers and should not be construed to
represent the volume of transactions that will ultimately be
consummated during any period of time. Indications of future
completed deal activity derived from the Intralinks DFP are based
on assumed rates of deals going from due diligence stage to
completion. In addition, the statistics reported by market data
providers may be compiled with a different set of transaction types
than those set forth above.
THIS PRESS RELEASE AND THE INTRALINKS DFP (COLLECTIVELY THE
"MATERIALS") ARE PROVIDED "AS IS" FOR INFORMATIONAL PURPOSES ONLY.
INTRALINKS MAKES NO GUARANTEE, REPRESENTATION OR WARRANTY OF ANY
KIND REGARDING THE TIMELINESS, ACCURACY OR COMPLETENESS OF THE
CONTENT OF THE MATERIALS. THESE MATERIALS ARE BASED ON INTRALINKS'
OBSERVATIONS AND SUBJECTIVE INTERPRETATIONS OF DUE DILIGENCE
ACTIVITY TAKING PLACE, OR PROPOSED TO TAKE PLACE, ON INTRALINKS' OR
OTHER PROVIDERS' VDR PLATFORMS FOR A LIMITED SET OF TRANSACTION
TYPES. THESE MATERIALS ARE NOT INTENDED TO BE AN INDICATOR OF
INTRALINKS' BUSINESS PERFORMANCE OR OPERATING RESULTS FOR ANY
PRIOR, CURRENT OR FUTURE PERIOD, NOR ARE THESE MATERIALS INTENDED
TO PROMISE, GUARANTEE OR ASSURE FUTURE LEVELS OF COMPLETED DEAL
ACTIVITY. THESE MATERIALS ARE NOT INTENDED TO CONVEY INVESTMENT
ADVICE OR SOLICIT INVESTMENTS OF ANY KIND WHATSOEVER.
THE INTRALINKS DFP MAY BE USED SOLELY FOR PERSONAL,
NON-COMMERCIAL USE. THE CONTENTS OF THE INTRALINKS DFP MAY NOT BE
REPRODUCED, DISTRIBUTED OR PUBLISHED WITHOUT THE EXPRESS WRITTEN
PERMISSION OF INTRALINKS. FOR PERMISSION TO REPUBLISH INTRALINKS
DFP CONTENT, PLEASE CONTACT info@intralinks.com.
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