The report that follows HERE is our latest update on m&a values and trends in the dozen+ sectors of the information technology industry that we follow and sometimes lead. It’s too soon to tell how the consternation in the political world will affect this industry. High levels of liquidity and low interest rates help a lot, but uncertainty doesn’t. And while our sector remains fairly hot – see the report – overall m&a volume and value was clearly down in the first half of 2016 compared to the second half of 2015. Last year, m&a was torrid – with 39 mega deals valued at $10bn or more in the second half alone. So it’s not shocking to see overall m&a values and volume fall off a bit. Political consternation is a concern, however.
I was having lunch the other day with a leader of a company that provides software to help financial institutions comply with various rules and regulations. The focus was around acquisition opportunities. A good discussion ensued, as there are lots of interesting, fast-growing companies in what we call the “GRC” space (Governance Risk and Compliance) that naturally lend themselves to being part of a larger organization. But the main takeaway of our discussion was the growing emphasis on cyber security as part of a GRC solution. “One can’t be all things to all people,” he said, but “we can’t go visit a company without a proposition for their cyber security needs.” This is telling, and fits with our sense of the world in which we live today.
It’s a busy time for fintech dealmakers. Not only are people investing in disruptive fintech companies in the US and the UK, but entrepreneurs with new approaches in China, Germany, Sweden, Singapore, India and a dozen other countries are also seeing massive action. We’ve always taken a global approach to advising clients and this week we were pleased that the M&A Advisor named us as the Boutique Investment Bank of the Year at their 8th Annual International M&A Awards fete.
In one of the more interesting transactions in the information space of late, Colorado-based IHS (NYSE:IHS) and London-based Markit (NASDAQ:MRKT) announced their intent to merge yesterday. Based upon March 18, 2016 closing prices, the transaction values IHS and Markit at about $7.5bn and $5.2bn in equity value (or $10.4bn and $5.9bn in enterprise value), respectively. Upon completion of the merger, the combined company will be renamed IHS Markit. We’re still trying to figure out what it all means.
Earlier this week, to start the New Year, I was privileged to attend a breakfast discussion led by Bo Cutter, Senior Fellow of the Roosevelt Institute; formerly a member of President Clinton’s National Economic Council, President Carter’s Executive Director for Budget, and Chief Economist at Warburg Pincus. Cutter asked another guest to speak, Frank Wisner. Among other things, Mr. Wisner was the U.S. Ambassador to Egypt, Philippines and India; a former Undersecretary of State; and a former Undersecretary of Defense. He served in the administrations of Presidents Reagan, Carter, George HW Bush, and Clinton. In 2011, President Obama asked Wisner…