According to Intralinks, a leading financial technology provider of virtual data rooms (VDRs) for the global banking, deal making and capital markets communities, M&A activity worldwide is expected to grow throughout the remainder of the year.
The Intralinks Deal Flow Predictor (DFP) forecasts the volume of future M&A announcements by tracking early-stage M&A activity – sell-side M&A transactions across the world that are in preparation or have begun their due diligence stage.
The Intralinks Deal Flow Predictor has been independently verified as an accurate six-month forecast of future changes in the worldwide volume (number) of announced M&A transactions, as reported by Thomson Reuters.
We have analyzed their predictions a number of times over the years and likewise have found them to be a very good indicator of future deal making activity. In their latest DFP they indicate:
According to Thomson Reuters data and Intralinks’ own analysis, the worldwide number of announced M&A deals rose by 5% year-over-year (YOY) in Q1 2018. Based on the levels of early-stage M&A activity which Intralinks has seen in the past six months, our predictive model is forecasting that over the next two quarters YOY growth in the worldwide number of announced deals will accelerate to 8%.
This is very positive news for those preparing to exit their company and is in agreement with ongoing discussions we have regularly with the professional buyers we work with on our transactions. They all tell us that they simply cannot see enough deals; they have so much capital available that it outruns the number of deals they look at.
This also agrees with our own transaction activity. YTD we are 16% ahead of last year in terms of deals closed (and 2017 was a record year for Generational Equity). In addition, we are 26% ahead of clients under dual-signed letters of intent (LOI). A dual-signed LOI is a good indication that a deal will close as it shows that both the buyer and the seller are ready to finalize a transaction in the next few weeks or months (depending on how long due diligence takes).
We are in agreement with Intralinks: The record seller’s market continues!
But Intralinks points out that there are some clouds on the horizon:
Despite such positive underpinnings, we believe that the near-term risks of an M&A market correction are increasing: the M&A market is in the fifth year of its current up-cycle; valuations are at record highs and 23% above their 25-year average; global equity markets are down 7% since their January 2018 peak.
Sadly, history has shown that all seller’s markets do eventually end. Rising interest rates, stock market corrections, recessions (or fear of them), political turmoil and a number of other factors can individually, and in some cases collectively, stifle and cut off seller’s markets.
So, we are encouraging attendees at our exit planning conferences to carefully review and update their exit plans and timing in the light of where we are in the current cycle.
I have never heard a business owner complain about exiting too soon, but dozens have lamented about waiting too long, until demand and valuations have both dropped dramatically.
Remember that there are two kinds of business owners:
Trust me – it is better to be the former rather than the latter!
To learn more about the current market cycle, how long it might last, and how it could impact your exit timing, you should attend a Generational Equity exit planning conference near you. Complimentary and highly educational, these meetings will introduce you to the key facets of creating an effective exit plan and how to time it optimally for you and your family. To learn more about us and about our conferences, please use the following links:
And special thanks to our friends at Intralinks for once again creating a very informative DFP, which we trust will be as accurate as all the rest through the years.
By Carl Doerksen, Director of Corporate Development at Generational Equity.
© 2018 Generational Equity, LLC. All Rights Reserved.
it all started with a conference.
start your story today,
speak directly with one of our senior advisors +1-972-232-1121
The information we learn from customers helps us personalize and continually improve your experience. Here are the types of information we gather.
We receive and store any information you enter on our Web site or give us in any other way. We do not sell or rent your personal information to others without your consent. We use the information we collect only for the purposes sending promotional information, enhancing the operation of our site, serving advertisements, for statistical purposes and to administer our systems. We DO NOT use third parties to provide customer service, to serve site content, to serve the advertisements you see on our site, to conduct surveys, to help administer promotional emails, or to administer drawings or contests, but reserve the right to do so in the future without advance notice.
By submitting my name electronically and clicking the “submit” button, I understand that I am providing Generational Group, Inc., Generational Equity, LLC, Generational Capital Markets, LLC, DealForce LLC, their affiliates, representatives, contractors, etc. (“Generational Group”) my telephone number, which may include a number that is wireless and/or a number that is on a national, state, or other Do Not Call registry or list. I hereby consent and agree to receive telephone calls including any autodialed and/or pre-recorded telemarketing calls and/or text messages (telemarketing) from or on behalf of Generational Group at the telephone number provided. I further consent and agree that telephone calls may be made using automated technology such as an automatic telephone dialing system, artificial or prerecorded voice, or SMS text messaging. Consent is not a condition of purchase. I further warrant and represent that any telephone number provided is not on any state or national Do Not Call Registry and that by agreeing to these terms and conditions that if any number provided is on any such registry, I hereby consent and agree to receive telemarking calls and/or communications including any phone calls, text messages, URLs, links, emails, etc. to the telephone number(s) and/or any e-mail addresses provided. I understand that by entering my name in the electronic form provided, that I am signing my name as equally as if it was my handwritten signature and that it is my intent to provide an “electronic signature” as that term is defined in state and federal law, as well as industry practices for e-commerce.
For reasons such as improving personalization of our service, we might receive information about you from other sources and add it to our account information.
Generational Group may license the use of its intellectual property including but not limited to its name, likeness, and logo for the use of affiliated offices. Such affiliated offices may not be owned, controlled, managed, supervised or staffed by employees, officers, or agents of Generational Group. Affiliated offices may be independently owned and operated. For more information about a particular office, please contact Generational Group at its office in Dallas, Texas.
This page may contain other proprietary notices and copyright information, the terms of which must be observed and followed.
Information on this web site may contain technical inaccuracies or typographical errors. Information may be changed or updated without notice. Generational Group may also make improvements and/or changes in the products and/or the programs described in this information at any time without notice.
Generational Group does not want to receive confidential or proprietary information from you through our web site. Please note that any information or material sent to Generational Group will be deemed NOT to be confidential. By sending Generational Group any information or material, you grant Generational Group an unrestricted, irrevocable license to use, reproduce, display, perform, modify, transmit and distribute those materials or information, and you also agree that Generational Group is free to use any ideas, concepts, know-how or techniques that you send us for any purpose.
Our computer system protects personal information using advanced firewall technology.
Information Generational Group publishes on the World Wide Web may contain references or cross references to other products, programs and services that are not announced or available in your country. Such references do not imply that Generational Group intends to announce such products, programs or services in your country. Consult a Generational Group representative for information regarding the products, programs and services which may be available to you.
Generational Group makes no representations whatsoever about any other web site which you may access through this one. When you access a non-Generational Group web site, please understand that it is independent from Generational Group, and that Generational Group has no control over the content on that web site. In addition, a link to a non-Generational Group web site does not mean that Generational Group endorses or accepts any responsibility for the content, or the use, of such web site. It is up to you to take precautions to ensure that whatever you select for your use is free of such items as viruses, worms, Trojan horses and other items of a destructive nature.
IN NO EVENT WILL Generational Group BE LIABLE TO ANY PARTY OR ANY DIRECT, INDIRECT, SPECIAL OR OTHER CONSEQUENTIAL DAMAGES FOR ANY USE OF THIS WEBSITE, OR ON ANY OTHER HYPERLINKED WEBSITE, INCLUDING, WITHOUT LIMITATION, ANY LOST PROFITS, BUSINESS INTERRUPTION, LOSS OF PROGRAMS OR OTHER DATA ON YOUR INFORMATION HANDLING SYSTEM OR OTHERWISE, EVEN IF WE ARE EXPRESSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Furthermore, all information contained within this website is the property of Generational Group.
Success, you have been added to our list.