Speed and Certainty Become Powerful Differentiators

Many buyers today are using speed and certainty of close to gain an edge in highly competitive deal processes.

Wednesday, December 5, 2018

From a volume perspective, dealmaking slowed during the first three quarters of 2018, with the number of transactions completed globally falling 17.4% on a year-over-year basis. But the total value of M&A transactions completed in the first nine months of the year increased 30.0%, reflecting rising valuations and the prevalence of larger deals.

Accommodative debt markets, continued economic expansion, and aggressive behavior by financial sponsors continue to fuel higher multiples. Valuation trends have been particularly strong in the technology and healthcare sectors.

In an environment where robust valuations are virtually a given for high-quality companies, speed and certainty of close have become increasingly important tools that bidders can use to differentiate themselves in hypercompetitive deal processes. In addition to preemptive bids becoming more common, buyers are using a host of tactics that allow them get to the finish line faster and provide more certainty in their ability to do so—characteristics that are appealing to sellers in any environment, but especially at a time when many believe we may be in the later stages of the current economic expansion and bull stock market.

In this issue of Merger Tracker, we examine some of the tools commonly used today to accelerate the dealmaking process and highlight recent transactions that William Blair has facilitated on compressed timelines.

Highlights include:

  • Tactics used by buyers to accelerate dealmaking processes
  • Sellers prepare to run fast
  • Recent transactions highlight the need for speed

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