Intralinks predicts global announced M&A volume for the full year 2014 will show an annual increase of between six and 10 percent
New York, July 15, 2014 — 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. Intralinks is also detailing results from a separate Global Sentiment Survey it conducted that gauged sentiment on the future of the global M&A market. Together, the research provides unique insight into global M&A deal volumes and market trends through Q4 2014.
The Intralinks DFI forecasts changes in the volume of global M&A deals that are expected to be announced in the next six months. The latest data, compiled through the end of June 2014, shows 16 percent quarter-on-quarter (QoQ) and 12 percent year-on-year (YoY) increases in early-stage global M&A activity, with particularly strong performances in Europe, Middle East and Africa (EMEA) and North America. Overall, this quarter’s results point to sustained momentum in M&A activity through the end of 2014, building on the strong levels of M&A activity seen in the last year. Based on the results of the Intralinks DFI so far this year and its strong correlation to the volume of future announced deals, Intralinks is predicting that global announced M&A volumes for 2014 as a whole will, for the first time since 2010, show an annual increase of between six and 10 percent, compared to 2013.
“The global M&A market is continuing to exhibit higher levels of activity compared to 2013, maintaining optimism among dealmakers,” said Matt Porzio, vice president of M&A strategy and product marketing at Intralinks. “The combination of a good lending environment and high quality assets and companies for sale are driving this growth. Deal volume continues to go up and we expect to see a good number of high profile deal announcements through the end of 2014, especially in sectors like manufacturing and telecommunications, media and entertainment.”
Intralinks DFI Highlights – Outlook for Q4 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 The level of North American early-stage M&A activity grew 17 percent YoY, sustaining the momentum in this market from 2013. Deal volume was up 22 percent QoQ, reflecting some seasonal variation, and the fact that some companies worked to complete deals while interest rates remain low and confidence in an economic recovery in the United States continues to increase. EMEA Europe continues to perform strongly and consistently, with a 17 percent YoY increase, paired with a 17 percent increase QoQ. Even countries that were recently written off as poor environments for investments, such as Spain, Portugal and France, are making a comeback. Germany continues to be especially strong and is still seen as a safe haven for investments. For the last four quarters, EMEA has shown strong performance and we anticipate that this trend will continue through 2014. Latin America Latin America remains weaker than North America and EMEA but is poised for growth. Although early stage M&A activity was down seven percent YoY, there was a healthy increase of 20 percent QoQ. This surge was led by Brazil, which alone saw a 26 percent increase QoQ, which we expect will be reflected in deal announcements later this year. Contrary to these findings, however, Intralinks’ Global Sentiment Survey showed that dealmakers in Latin America continue to express reduced optimism about prospects for the region, including for Brazil, for the remainder of 2014. Asia Pacific Deal activity levels in the Asia Pacific region remain volatile, down 15 percent YoY and QoQ. While Japan is quite strong, the Chinese government, one of the largest investors in the region, continues its economic realignment resulting in decelerating overseas acquisitions, which is having a notable affect in Australia and beyond.
Global Sentiment Survey In June 2014, Intralinks conducted a 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 results include:
Overall, 67 percent of M&A professionals are optimistic about the current deal environment, consistent with reported sentiment from the last two quarters
77 percent predict M&A activity will increase over the next six months, consistent with last quarter and with the Intralinks DFI data
North American respondents again expressed the most optimism about future deal activity in 2014, with 80 percent expecting an increase, while respondents in Latin America continue to show the most pessimism, with only 37 percent expecting increased deal activity through the remainder of the year
Our Global Sentiments Survey showed that dealmakers have some emerging doubts regarding deal valuation, which survey respondents all agreed was the greatest impediment to getting deals done. In addition:
Shareholder activism does not appear to be a concern. Despite some reports of increased shareholder activism against underperforming companies, dealmakers do not really see signs of an increase, with only 52 percent of our respondents expecting shareholder activism.
Despite indications from recent deal activity, only 57 percent of respondents see a sign of a tech bubble. Interestingly, 71 percent of UK respondents thought the recent deals and tech company valuations were a sign of a tech bubble.
While many dealmakers have been discussing the number of mega-deals already announced in 2014, only half of our survey respondents think this is a sign of more mega-deals will be announced through the end of this year.
While we know that the political environment can affect M&A activity globally, 62 percent of survey respondents stated that they do not expect a change in political interference in M&A activity over the next 12 months.
About Intralinks Dealspace™ Intralinks is a leading supplier of solutions for managing strategic transactions. Intralinks Dealspace, the market leading virtual data room (VDR), gives M&A professionals a complete solution to manage the full lifecycle of a deal. Intralinks Dealspace supports every step of the deal process, enabling deal teams to securely exchange data with buyers, sellers and advisors, helping speed strategic transactions such as mergers, acquisitions, divestitures, capital raises and corporate restructurings.
About the Intralinks Deal Flow Indicator The Intralinks Deal Flow Indicator provides Intralinks’ perspective on the level of M&A due diligence activity taking place during any given period of time. The statistics contained in the Intralinks DFI represent the volume of VDRs opened, or proposed to be opened, through Intralinks or other providers for the purpose of conducting due diligence on proposed transactions including asset sales, divestitures, private placements, financings, capital raises, joint ventures and partnerships. These statistics are not adjusted for changes in Intralinks’ share of the VDR market or changes in market demand for VDR services. These statistics may not correlate to the volume of completed transactions that may be reported by market data providers and should not be construed to represent the volume of transactions that will ultimately be consummated during any period of time. Indications of future completed deal activity derived from the DFI are based on assumed rates of deals going from due diligence stage to completion. In addition, the statistics reported by market data providers may be compiled with a different set of transaction types than those set forth above.
THIS PRESS RELEASE AND THE INTRALINKS DFI (COLLECTIVELY THE “MATERIALS”) ARE PROVIDED “AS IS” FOR INFORMATIONAL PURPOSES ONLY. INTRALINKS MAKES NO GUARANTEE, REPRESENTATION OR WARRANTY OF ANY KIND REGARDING THE TIMELINESS, ACCURACY OR COMPLETENESS OF THE CONTENT OF THE MATERIALS. THESE MATERIALS ARE BASED ON INTRALINKS’ OBSERVATIONS AND SUBJECTIVE INTERPRETATIONS OF DUE DILIGENCE ACTIVITY TAKING PLACE, OR PROPOSED TO TAKE PLACE, ON INTRALINKS’ OR OTHER PROVIDERS’ VDR PLATFORMS FOR A LIMITED SET OF TRANSACTION TYPES. THESE MATERIALS ARE NOT INTENDED TO BE AN INDICATOR OF INTRALINKS’ BUSINESS PERFORMANCE OR OPERATING RESULTS FOR ANY PRIOR, CURRENT OR FUTURE PERIOD, NOR ARE THESE MATERIALS INTENDED TO PROMISE, GUARANTEE OR ASSURE FUTURE LEVELS OF COMPLETED DEAL ACTIVITY. THESE MATERIALS ARE NOT INTENDED TO CONVEY INVESTMENT ADVICE OR SOLICIT INVESTMENTS OF ANY KIND WHATSOEVER.
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