The upcoming season seems to be pretty good for Merger and Acquisition Advisors or so a recent survey claims. According to the results, all M&A advisors are going to have more offers on the table and clients will expect them to finalize an increased number of deals. Sounds good, doesn’t it? What makes it even better is that the clients do not mind paying for services by qualified advisors as long as they provide effective advice.
The survey has been carried out by a reputed firm in the industry that had more than 120 decision makers, comprising of both treasurers and financial officers. The survey participants have predicted more merger and acquisition activity next year. The net activity is expected to be greater than $2.7 trillion in the year 2014; this year the calculated values are about $2.3 trillion. In Europe, Asia and the Middle East, almost 35% respondents claimed that they would focus on a transformational deal. Last year, this value was just a little more than 15%.
The respondents are all keen to participle in M&A deals this year, and they are also eager to pay any costs that arise in the process no matter how high they are. There are just 31% firms who are regarding fees as a critical factor in selecting an M&A advisor. This is the lowest value that the survey has recorded in the last five years. In EMEA, the percentage is 15%, which is significantly lower. Last time the survey was conducted, these values were evaluated to be 45% overall and 56% for EMEA.
The survey makes it very clear that clients are considering a lot of different aspects, instead of just the fees. Almost 26% respondents regarded a quick and flawless deal as one of the most critical factors. Last year, this value was 23%. Perhaps, the figures have now increased because M&A deals are now becoming more complex than ever before. 26% of the respondents also claimed innovative deal structures to be just as important because smart solutions are desirable when problems become complicated.
So will the survey prove to be true or will the claims all become false as the year progresses? That has yet to be seen, but for right now, M&A advisors can indeed expect better times ahead.
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