Text by Pyr Marcondes, Senior Partner at Pipeline Capital Tech.
Here at Pipeline Capital Tech, we believe that capital is tech and data is the foundation of some of the most important transformations in the business world. This holds true for the M&A sector as well.
We are also setting up an increasingly robust cross-border operation because we believe this is a good time (war be damned) to do so.
McKinsey study seems to confirm.
Let’s start with the big numbers.
The value of large M&A deals increased 67 percent last year to $5.9 trillion, according to a recent McKinsey review of the global mergers and acquisitions market. The number of large deals by corporations, PE (Private Equity) companies and special purpose acquisition companies (SPACs) also increased 37% from 2020. Traders in the Americas led the action with 52% of all M&A value around the world. Technology, media and telecommunications was the most active sector, increasing its share of global M&A activity to 34% of deal value from 30% in the previous year.
(Attention to the highlight of technology and media, Pipeline’s specialties)
About cross broder, McKinsey is direct and objective: Cross Border must lead the movement of the sector in 2022.
Now, on the strategy of using data logic and the dynamics of the digital world applied to the M&A market, McKinsey says the following:
According to a McKinsey analysis of more than 20 years of M&A data, the strategy that creates the most value for companies is programmatic M&A,
Programmatic M&A is not just a volume game, but a strategy to systematically build new businesses, services and capabilities. It is a proactive, long-range strategy driven by leaders’ conviction in their corporate strategy, understanding of their competitive advantage and confidence in their ability to execute. It’s also the best way to get the most out of any large-scale deals that may come your way. McKinsey research shows that a company that uses the big business approach has only a 50 to 50 chance of achieving higher shareholder returns than its peers – no better than a coin toss. But companies that combined a big business and programmatic approach generated higher returns for shareholders.