Mid-market merger and acquisition deals accounted for 58% of the total Asia-Pacific deal volume in 2016 so far and the trend is expected to continue due to economic volatility in the region, says a report.
Amid the economic uncertainty and volatility, dealmakers are taking a more cautious stance in valuations and dealmaking. As a result of this, the Asia-Pacific deal market has seen fewer headline-grabbing megadeals and more deals in the mid-market (deals valued between $10 million and $250 million).
So far this year, mid-market deals make up 58% of Asia-Pacific deal volume and 22% of value.
“Recent FDI norms and the much awaited GST will perhaps be a game changer and will further accelerate the deal activity from an inbound investment, domestic M&A, and PE perspective,” said Neha Paul, National Leader – Corporate Finance Advisory Services, Baker Tilly DHC on the Indian deals outlook.
Paul further noted that “there is strong interest from domestic players in buying out stressed assets. Investors are looking at this as an opportunity to buy quality assets which could yield high returns.”
Business advisory firm Baker Tilly International and deal tracking firm Mergermarket’s newsletter titled “Dealmakers: Mid-market M&A in Asia-Pacific 2016”, noted that mid-market M&A has grown its share of the world’s mid-market total activity by 11% over the last five years, from 28% in 2011 to 39% in 2015.
Sectors driving Asia-Pacific mid-market M&A from 2011 to so far this year include industrials and chemicals (22 percent of total deal volume); technology, media, and telecommunications (17% of total deal volume); and consumer (11% of deal total volume), it said.
In 2015, Asia-Pacific posted 763 cross-border mid-market deals worth $52.6 billion, accounting for 32% of total mid-market volume and 32% of value in the region.
So far this year, the region has seen 364 cross-border mid-market deals worth $25.8 billion, or 32% in volume terms and 33% by value.
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Source: Business-Standard