BY Fraser Tennant
Global M&A in Q1 2024 will see an uptick in activity with acquisitions in the technology, media and telecommunications (TMT), consumer, healthcare and energy sectors set to rise, according to a new report by Datasite.
In the ‘Datasite Forecaster Special Report: The Year of the Buy-Side’, the virtual data room provider suggests that while tighter financing costs, a volatile market and the long-term impact of the coronavirus (COVID-19) pandemic have curbed M&A deal activity in 2023, there will be opportunities in 2024.
According to the report: (i) buyers are taking advantage of softening market conditions and lowered seller expectations to pursue one-on-one acquisitions with vigour; (ii) with sell-side M&A finally cooling in the real estate and industrials industries, acquirers are scouring the landscape for pickups; and (iii) more advisers are being hired for one-on-one acquisitions as buyers decide to take no chances during this rare window of opportunity.
“Fewer sell-side auction processes in top industries this year have opened the door to more one on one deals,” said Merlin Piscitelli, chief revenue officer for Europe, Middle East and Africa (EMEA) at Datasite. “Buyers are taking full advantage, scouring the real estate, industrials, TMT, and consumer industries for pickups.
“The exception to this is energy & power, which is seeing a resurgence on both sides of the M&A equation,” he continued. “Meanwhile, life science and healthcare M&A continues to slowly recover from its COVID-19 induced feeding frenzy.”
The report also suggests that artificial intelligence (AI)-powered technologies will continue to impact not only the kinds of deals being done but also how deals are managed.
“From its ability to streamline several aspects of dealmaking, including powering data analysis and automating repetitive tasks, the momentum behind AI is set to grow,” added Mr Piscitelli. “In fact, in a recent Datasite survey, 42 percent of global dealmakers said productivity was the biggest benefit of using generative AI in their business and most expect that AI will help speed up deals by 50 percent.”
Another sign, according to Datasite, of a steady start to M&A activity in Q1 2024 is the willingness of acquirers to bring in financial advisers – buy-side deals being one-on-one acquisitions in which advisers have traditionally played a smaller role.
Mr Piscitelli concluded: “For years, strategic buyers have struggled to acquire in a market rife with private equity competition and inflated valuations. Without knowing how long their window of opportunity will last, buyers are leaving nothing on the table.”
Report: Datasite Forecaster Special Report: The Year of the Buy-Side