Amid the backdrop of a record-breaking 2021 for global mergers and acquisitions (M&A) activity, SS&C Intralinks partnered with Mergermarket to survey 300 global dealmakers on their current market sentiment and perceived opportunities over the next 12 months. Respondents were also asked to assess COVID-19’s impact on the future deal environment.
Of the dealmakers surveyed, 64% expect the level of M&A activity over the next 12 months to increase, and 24% anticipate that activity to increase significantly. With an increase of 59% in deals made in the first half of 2021 over the same period in 2020, that optimism is certainly founded. Many dealmakers are continuing to show a strong appetite for transactions, with 36% of private equity respondents reporting they expect to undertake four or more deals over the next 12 months and 68% of respondents expecting to undertake between one and three deals.
Environmental, Social and Governance (ESG) is an increasingly critical concern when it comes to M&A, as reflected by 62% of respondents expecting ESG considerations in the deal process to increase in the next three years. In addition, 48% expect a corresponding increase in ESG-related due diligence over the next three years. Greenhouse gas emissions and carbon management were the top issues reported by 42% of respondents.
There were also challenges revealed by the survey. Data analytics was cited as the most disruptive trend, with 55% of respondents expecting it to impact M&A processes over the next year. With cybersecurity as another concern, many companies are increasingly looking to hire external talent to utilize cybersecurity technology and mitigate the threat of cybercrimes.