Earlier this month, Intralinks published the latest edition of its Deal Flow Predictor report (the Report), which tracks global, early-stage M&A activity in order to predict M&A deal volume in the coming quarters.
According to the Report, early-stage M&A activity points to a healthy climate for global M&A through Q4 2015. The Report’s midpoint forecast for 2015 is 14% growth year-over-year in announced global M&A deals, with a lower bound of 9% and an upper bound of 14%.
The fastest growing area was the Asia Pacific region, which posted 15.8% growth in early-stage M&A activity during the first six months of 2015 compared to the same period in 2014. China and South Korea were bright spots in the region and are expected to continue being significant drivers of M&A activity.
Early-stage M&A activity in North America was also solid, growing 10% during the first six months of 2015 compared to the same period in 2014. The Report further notes that in the first six months of 2015, almost 50% of global deal value involved North American targets. These recently completed mega-mergers may push regional M&A activity higher in the coming months, as other companies seek out deals of their own in response to industry consolidation and a shifting competitive landscape.
Latin America was the slowest growing region, with just 0.5% growth in early stage M&A activity during the first six months of 2015 when compared to the same period in 2014. Though this growth was meager, the Report observes that Q2 2015 was the first quarter since Q4 2013 that Latin American early-stage deal activity has increased based on a six-month period, perhaps signaling a tentative rebound in a region that has been hampered by weakened commodities and oil prices.
As for global M&A sentiment, the Report found that in a survey of dealmakers, optimism amongst respondents decreased in Q2 2015 compared to the previous quarter, but remained generally positive. 59% of respondents expect deal volume to increase over the next six months, compared to 65% in the survey for the previous quarter. Given increased early-stage deal activity across all regions, the continued optimism of dealmakers appears to be well-justified.