Business leaders say this is a good time to acquire companies and believe that mergers and acquisitions may rise in the next two quarters, according to the DealMaker Meter report, Optimism Prevails Despite Uncertainty, from Donnelley Financial Solutions (NYSE: DFIN), a leading risk and compliance company. Based on an online survey of 100 company executives, financial experts including advisors, corporate clients, lawyers, and bankers, the DealMaker Meter provides a snapshot of recent activity, including IPOs, M&A and SPACs, and forecasts the upcoming three months of activity.
Due to continued volatility in the global economy, including disruptions in the global supply chain, war in Ukraine, and inflation, 67 percent of those polled believe it's a good time to acquire companies, and 53 percent say that deal volume will rise. Similarly, 86 percent say that the pace of deals will continue at the current rate or possibly faster. While the market volatility from increasing inflation continues, a report by the U.S. Bureau of Economic Analysis complements these optimistic outlooks with encouraging economic news that real GDP grew 2.1 percent in 2022, following up strongly on a 5.9 percent increase in 2021.
"The DealMaker Meter report highlights the potential for growth and positive outlook for deals in the coming months," said Craig Clay, President of Global Capital Markets at DFIN. "Executives are doing their due diligence to determine accurate company values, and the report indicates that Q2 and Q3 of 2023 will start to see green shoots of IPO activity. The report also supports the belief that a large number of deals will occur in many regions, with the U.S. leading the way."
Other key findings include:
• Take-private activity continues: 76 percent think the pace of take-privates will continue or increase due to the economy.
• North America seen as most active in deals: Executives believe that deals will continue in all global regions, but 76 percent believe that North America will be the most active region, with APAC (25 percent) and EMEA (23 percent) next in line.
• Cybersecurity impacting dealmaking: 70 percent of executives are concerned that security breaches are impacting the number of deals being closed. Virtual data rooms, like Venue® by DFIN, are needed since they are designed to store and securely manage data across disparate company systems.