Technology To Help Issues Raised by Rising UK M&A Deal Volumes
Record-level deal activity in 2021 and the associated resource strain may mean dealmakers will turn away or delay deals in 2022, although many expect to circumvent the issue by using more technology, according to a new survey of 200 UK-based dealmakers by Datasite.
Low interest rates and opportunities abroad
According to the survey, almost half (43%) of UK dealmakers expect global deal volumes to increase in the next 12 months, supported by favorable interest rates and private equity cash piles. And they expect to see more restructurings (13%), refinancing and debt-financings (11%), and fundraisings (10%) in 2022.
Additionally, UK dealmakers will be looking for M&A opportunities abroad. More than a quarter (26%) of dealmakers said they expect between 25% to 50% of their 2022 M&A deals to involve acquiring or investing in targets operating in foreign markets.
“Our research confirms what we are already seeing at Datasite, where we can see deals on our platform at their inception rather than when they are announced,” says Merlin Piscitelli, Chief Revenue Officer for Datasite in Europe, the Middle East and Africa. “New projects on our platform in Europe, Middle East, and Africa are up 32% year over year through November, which is a very good indication of what’s to come. However, UK dealmakers’ focus on foreign markets means cross-border M&A is likely to return and with it will be an even greater need for technology that can help dealmakers collaborate across time zones and locations.”
Technology to help the deal process
In fact, a full 30% of UK dealmakers said they relied more heavily on technology in 2021 to deal with bandwidth constraints because of the surge in activity, while 20% said they turned away or delayed deals as a direct consequence.
Capacity won’t be the only issue dealmakers must contend with in 2022. Close to one in five (19%) UK dealmakers cited supply chain issues as the top risk to sink deals in 2022, ahead of labor shortages (17%) and environmental, social, and governance (ESG) issues (17%).
Piscitelli concluded: “Given that deals are likely to be more complex, technology and tools that help simplify and streamline the M&A process will be vital to dealmakers in reaching successful deal outcomes faster and more efficiently.”