M&A & Corporate Finance

Financier Worldwide presents its M&A and Corporate Finance: Corporate Advisor Handbook, containing detailed profiles of leading experts in the field of corporate finance from around the world. Comprising lawyers, accountants and consultants, this group of experts provide their clients with advice and solutions on corporate finance matters. These experts have extensive knowledge of buy side and sell side M&A services; carve outs and spin-offs; joint ventures and strategic alliances; due diligence; deal implementation and transaction structuring; complex deals such as those with a cross-border element; post-merger integration; and operational strategy, all across the full range of industries and sectors.

With specific reference to financing, these experts advise on financing instruments and financial structuring; acquisition financing; project finance; venture capital and private equity; project finance; securitisation; consortium banking and debt syndication; commercial borrowing ; debt restructuring; capital markets transactions such as corporate bonds and public offerings; and related legal and regulatory issues. These experts have acted for and advised private and public corporations, banks and financial institutions, investment funds, and high net worth individuals, in addition to many other entities. Whether you are a business professional seeking advice on corporate finance matters, or an advisor looking to expand your network by forging new relationships, this Handbook provides contacts with the experience to meet your needs.

M&A

The outlook for global M&A in 2018 has been positive. The first quarter of 2018 saw global activity reach a 17-year high, with 3774 announced deals, totalling $890.7bn. This represents the strongest start to the year since 2001, when Mergermarket began recording its data, and an 18 percent year-on-year increase in value compared to the first quarter of 2017.

Consolidation in the tech industry was notable. US tech mergers reached a record total of $47.6bn from 226 deals, making it the top sector by deal count. However, the top sector in terms of deal value was business services, with $116.9bn, 58.1 percent of which was generated by Cigna’s $67.9bn bid for Express Scripts.

In addition, while large tech companies have looked to diversify their offering through M&A, more traditional firms also had to react to newer, more innovative firms, with many looking towards defensive consolidation. Recent trade disputes between China and the US have served to boost these defensive strategies further.

With the availability of private and public capital apparently plentiful, and an attractive pipeline of target assets waiting to be explored, M&A dealmakers are licking their lips at the prospect of the M&A opportunities ahead.

However, a range of factors may cool deal activity from 2019 onwards, particularly in developed markets, including higher interest rates, a cyclical easing in global trade and investment growth, and a correction in equity prices back towards fundamentals.

Private equity

Not only did the private equity (PE) industry accumulate record levels of dry powder in 2017, but the US tax reform and persistently low interest rates were also beneficial, helping to drive record or near-record buyout and exit activity. Signed into law in December 2017, the Tax Cuts and Jobs Act (TCJA) is the most significant overhaul of US tax policy since 1986. The new law will impact individual taxpayers in all income tax brackets, all businesses and virtually every sector of the economy, including PE firms and their portfolio companies. The significant cut to corporate tax rates will be a boost for funds, potentially leading to improved returns in the future.

Global PE activity remained remarkably high, with many investors pursuing larger targets as the mid-market became saturated. In Q1 2018 there were 699 buyouts worth a total of $113.6bn, representing the strongest start to the year since 2007, according to Mergermarket. Q1 2018 is also the fourth consecutive quarter in which buyout activity has reached the $100bn figure.

Yet challenges remain. Deal count has dropped substantially since 2014 and multiples are at all-time highs, with around half of all companies acquired priced in excess of 11 times earnings before EBITDA. In response, the PE industry has continued to evolve and is scouting for deals to absorb the record amount of dry powder raised in recent years, and generate the attractive returns LPs expect. The PE industry is, if nothing else, resilient.

Banking and finance

Sourcing financial capital for any endeavour and in any economic climate can be a challenging affair – especially for those tasked with financing a mergers & acquisitions (M&A) transaction. In this space, no money equates to no deal.

However, for those ready, willing and able to take the M&A plunge, there are a number of channels through which a deal can be financed. Such pathways will be based on the state of the parties concerned, as well as their credentials in terms of their overall M&A and finance activities.

While capital has clearly been plentiful for the most part in recent years, a number of disruptive challenges to the M&A status quo are in the frame. Among these challenges are new business models and technologies, and the phasing in of regulations such as the forthcoming Basel III measures, which aim to strengthen the regulation, supervision and risk management of banks. Basel III, for example, has the capacity to usurp the status of banks as the traditional extenders of credit and providers of loans. Overall, such factors are likely to have a major influence on the M&A industry, affecting deal terms, capital considerations, financing techniques and structuring alternatives.