✒ The M&A pipeline is starting to thaw because:
- Roaring back of equity prices giving acquirers highly valued currency to pay for deals;
- Reopened corporate debt market making financing available;
- Rock bottom interest rate;
- Private equity providing a lot of dry powder to call upon;
- Pandemic giving companies new pressing problems to solve, which M&A offers a fix, such as securing supply chain, diversifying geographically, or acquiring specific capabilities.
In unprecedented time like this, getting the price or PMI right is difficult, thus doing big, one-off deal is riskier. Instead, doing a series of smallish acquisitions over time to add value seems to be a better approach.
Being a “programmatic acquirer”, who take more care in assessing targets, aligning M&A with broader corporate strategy and integrating with targets, is more likely to be supported by shareholders.