The mergers and acquisitions market is poised to reach near-record levels in 2018. As discussed previously, Washington’s pro-business stance and tax reform have been driving forces in this growth. Now with mega-mergers, where the value is $5 billion or more, it’s almost a foregone conclusion those businesses involved will use big name Wall Street investment banks to advise them on the transaction. But for smaller deals, especially those in the $500,000 to $500 million range, it’s still important to get sound financial advice. For those companies, the choice often comes down to M&A brokers versus M&A advisors. So what’s the difference between the two, and how will you know what’s right when it comes to your transaction?
Just last month, Sprint and T-Mobile shook up the cell phone industry as the two decided to merge in what’s an estimated $26 billion deal. This combination was years in the making and immediately makes the entity a major player in the sector, rivaling AT&T and Verizon.
Merger, Acquisition, or Joint Venture? Consider this before you decide.
As we’ve discussed in previous posts, the mergers and acquisitions market is seeing robust growth. In fact Goldman Sachs predicts M&A spending could reach $355 billion in 2018, a 6 percent increase over 2017. This uptick is being driven by such things as tax reform, digital strategies and M&A technology tools. But a merger or acquisition isn’t the only option when it comes to expanding into a new market, adding key products/services or building a customer base. In fact, strategic alliances and joint ventures are becoming increasingly popular for a variety of financial, operational and logistical reasons.
In 2017, the number of data breach incidents in the U.S. hit a record high of 1,579 breaches (ITRC). This number indicates a nearly 44% increase over the record high figures reported for 2016. The best method of preventing a data breach is to ensure your data is adequately secure. Many businesses, however, make the mistake of sharing and storing sensitive data via email or other cloud services that do not guarantee encryption. It’s not surprising, then, that these unsecured spaces have become easy targets for hackers. It’s currently estimated that the average cost of a data breach in the U.S. is $3.62 million, a staggeringly high figure that should make any business wary of a cyber attack.
If 2017 is any indication, the corporate development landscape for the near-term can be summed up with the phrase “The more deals the merrier.” And firms that are seeing this trend run the gamut from new start-ups to established corporations.
Expect big things in mergers and acquisitions through 2018. This is the word from Deloitte, which surveyed more than 1,000 executives to get their sense on these types of corporate activities. In fact, according to the report, nearly 70 percent of executives of U.S.-based companies expect deal flow will top 2017’s numbers.
