Intralinks DFI shows strong performance and year-over-year increase in APAC deal activity
HONG KONG, April 28, 2014 /PRNewswire/ -- 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.
The Intralinks DFI reliably forecasts changes in the volume of global M&A deals that will be announced in the next six months, or through the third quarter of 2014.
This quarter indicates sustained momentum in M&A activity in 2014, continuing to build on the strong levels of M&A activity seen in 2013. The latest data, compiled through the end of March 2014, shows a 16 per cent increase in year-on-year (YoY) early-stage global M&A activity, with particularly strong performance in Asia Pacific, which saw the region jump 18 per cent YoY and 10 per cent quarter-on-quarter (QoQ), with no indications that the decelerating Chinese economy is impacting dealmaking.
"Global M&A markets are healthy, maintaining high levels of activity and continued optimism among dealmakers," said Philip Whitchelo, vice president of strategy and product marketing at Intralinks.
"Many factors are driving a highly competitive market, including a good lending environment and the need of corporations and private equity 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."
"Deal volume throughout the APAC region in particular has been impressive, and this comes off the back of consistent year-on-year growth since Q1 2010 for the region. The data certainly points towards APAC continuing to experience strong growth over the next six months," Mr Whitchelo continued.
Intralinks recently held its popular Dealmakers APAC breakfast briefing in Hong Kong, which included senior representatives from EY, Allen&Overy and Freshfields Bruckhaus Deringer. Asked to comment on the the temperature of the regional deal landscape, the panelists mirrored the results of the Deal Flow Indicator, indicating stronger market conditions than in the previous 12 months.
Panelists agreed there had been a pick-up in activity across the region, with a number of substantial deals in Indonesia, Malaysia and Thailand over the last year. It was also noted that over the past five years, the inter-regional flow of M&A activity has completely transformed the deal landscape. What this means is that the universe of buyers has become larger, causing the price of assets to rise.
From a sector perspective, panellists said there has been significant activity in financial services, especially in banking and insurance, as well as in the energy sector.
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
North American levels of early-stage M&A activity grew 11 per cent YoY, sustaining some momentum. While deal volume was down 6 per cent 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 per cent YoY increase, paired with a 5 per cent increase QoQ. Regional instability and concerns about the Ukraine crisis aren't dampening enthusiasm and aren't expected to impact M&A activity, according to our survey.
Emerging Markets
Continuing a trend from 2013, Latin America deal volume increased 13 per cent YoY, but was down 10 per cent QoQ. Dealmakers in the region expressed reduced optimism about prospects for the second half of 2014.
Intralinks is also detailing results from a separate global survey that gauged sentiment on the future of the global M&A market.
Global Sentiment Survey
In March 2014, Intralinks conducted a separate 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:
Doubts emerged from the survey regarding deal valuation, which respondents all agreed was the greatest impediment to getting deals done. Germans in particular are also feeling pressure about energy costs for manufacturing, which 53 per cent agree make them a less attractive M&A target for international investors. In addition, 63 per cent of respondents in the UK expect a negative impact on M&A if the Scottish independence referendum were to pass.
