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M&A market is like a movie

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The M&A (Mergers and Acquisitions) market can be likened to a movie composed of various scenes, rather than just a single photograph, as my partner and journalist, Pyr Marcondes, often says. To capture the true essence of this market, it’s crucial to look at the full context and not fixate on isolated moments.

Text by Alon Sochaczewski, founder & CEO at Pipeline Capital.

While a recent headline from Valor Econômico may have raised some concerns about the M&A landscape, a comprehensive view reveals a much more positive picture.

Alberto Sansiviero Jr, my partner and experienced banker, shared a measured perspective:

“Despite adverse flows to the Stock Exchange limiting listing opportunities, I believe this can create ample space for mergers and acquisitions. Prices may adjust, but I believe profitable companies with good results will find liquidity through M&A.”

Performance of the M&A market in the first quarter of 2024

According to Kroll’s report, the first quarter of 2024 saw around 320 M&A transactions in Brazil, totaling over 28 billion reais.

While there was a slight 4% decrease in the number of transactions compared to the previous year, the financial volume demonstrates the sector’s robustness and resilience.

Source: O estado das operações de F&A no primeiro trimestre de 2024 | VEJA

Optimistic projections for the M&A market in 2024

An article from Canaltech expresses an optimistic outlook for the M&A market in 2024. The stabilization of inflation and interest rate cuts in December 2023 have increased investor confidence.

Furthermore, government policies aimed at encouraging foreign investments and improving market regulations create an attractive environment for mergers and acquisitions.

Highlighted sectors

PwC’s projections estimate a 20% to 25% growth in M&A in agribusiness for 2024, particularly focusing on AgTechs and companies in the biological fertilizers, paper, and pulp sectors.

Sustainability and innovation remain primary objectives for investors in agribusiness.

Source: M&As no Brasil em 2024: Projeções e expectativas para um cenário promissor | Canaltech

M&A growth perspective

According to Veja, a continuation of the upward trajectory of M&A operations in Brazil is expected throughout 2024. The growth in the mergers and acquisitions pipeline reinforces a perspective of a more dynamic and favorable market.

These analyses shed light on a promising future for the M&A market in Brazil, supported by interesting macroeconomic conditions, beneficial government initiatives, and increasing investor optimism.

For more information, it is recommended to directly access sources such as CanaltechPwC and Veja.

Recent transactions

Recent cases further support this encouraging outlook:

  • Omnik raised R$ 7 million in a round led by ABSeed, innovating e-commerce by transforming them into marketplaces.

  • CRMBonus expanded its Series B by R$ 400 million with additional investments of US$ 5 million from Vivo Ventures and US$ 5 million from Industry Ventures.

  • Ben.Up, LG’s HR Tech benefits platform, was acquired by Vectis Partners, although the transaction value wasn’t disclosed.

  • BTG Pactual, the largest investment bank in Latin America, acquired M.Y. Safadi Capital Management.

Text by Alon Sochaczewski, Founder and CEO of Pipeline Capital.
Originally published on LinkedIn.

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