Dear Clients and Friends:
Our latest report on the M&A values among the 11 sectors of the FinTech, Data and Analytics world that we follow is HERE.
In case you haven’t noticed, after a very brief COVID pause, tech M&A is hot again. According to Refinitiv, last year the value of worldwide M&A deals was around $634 billion. We exceeded that in the first half of 2021 – and we’re still going strong. That’s good for us. Further, about a quarter of those deals are in our sweet spot: tech, data, and analytics.
The drive for tech M&A should not be surprising. We live in a world in which companies must grow to survive. And growth requires vision, innovation, talented people, hard work and time. M&A adds a layer of complexity – and risk. If done, right, it can accelerate product and geographic expansion, increase market share, and improve profitability. But success is not automatic. According to a recent Harvard Business Review report, 70% – 90% of M&A transactions fail to deliver on forecast results. That’s a lot.
It’s not for lack of trying. Most acquirers carefully vet candidates, negotiate hard, and conduct thorough due diligence reviews. It’s in the execution where most deals succeed – or fail. The best acquirers know that success requires clear post-merger goals, clear roles, and a dose of humility. They know it’s about melding the best of the best – not about winner-take-all. As noted in the HBR article: “… not only are you asking two companies to integrate under one corporate mission, but you are bringing together groups of people with their own personalities, ambitions, behavioral traits and ways of working…” If you chase away the key people, it’s not clear how you will achieve success.
As you will see in our latest REPORT, the M&A market in fintech, data and analytics is strong; buyers and sellers are active; opportunities are abound. We are here to help. But it’s up to you to ensure the transaction is a long-term success.