Equiteq’s David Jorgenson and Jean-Louis Michelet met at ESSEC Business School in Singapore to discuss the opportunities and challenges impacting M&A activities in the Asia-Pacific region.
Simply put, there are massive opportunities in Asia-Pacific for knowledge-driven B2B services companies. While most of the region’s services markets are not as advanced as in more developed economies in Europe and North America, globalization and technological revolution are driving international demand for specialist businesses in Asia-Pacific.
A case in point – Activeo moves in on Asia
Activeo’s purchase of Singaporean-based company Kasturi Technology, a specialist in unified communications (UC) tech, illustrates the point that there is high demand from international businesses for Asian partners that would allow them to diversify and tap into the growing opportunities in emerging markets.
Paris-based Activeo, a leader in customer collaboration technologies and customer experience consulting, acquired Kasturi and took a participation in Jusfeedback, two Singapore-based firms, to consolidate its position and expertise in the customer collaboration and UC market.
Such a move is typical for technology companies, whose target market is becoming more global. It’s necessary for these businesses to look for opportunities further afield, where new opportunities lie, particularly if their home market has become saturated.
Indeed, our recently launched Global Consulting M&A report shows that in Asia-Pacific and Australasia, cross-border deals represented over half of all the M&A activity in 2016.
Large buyers look to emerging markets for growth
Often, for many large buyers, the key is to identify acquisition targets in the region that would provide them with niche knowledge and skills that expand their offering and enhance their footprint across the globe. Interestingly, these acquisitions are also becoming cross-sector driven, especially when strong tech-oriented intellectual property is at the heart of the deal.
In the case of Activeo, the company’s main shareholder, Joseph Kort, wanted the firm to become a credible international player in the next five years.
Joseph said: “We envisaged building a firm with a commanding presence in not only Europe but also Asia, while remaining focused on our niche offering. Our aim with the Kasturi acquisition and the Jusfeedback participation was to improve Activeo’s coverage of international accounts, roll out our service offerings and products on a broader scale and significantly increase revenues and profitability.”
What are B2B consulting buyers looking for?
Our 2016/17 Buyers Research report shows that there is robust acquisition demand across all sectors, with media buyers having the most appetite for future acquisition activity. The report also revealed that IT consulting buyers have the largest budgets for deals, with buyers and their clients in both of these sectors facing opportunity and disruption from technological change.
We expect to see these trends drive strong demand for acquisitions that bring cutting-edge capabilities on-board.
This blog is the final in the series of blogs on the Asian-Pacific M&A market outlook. If you’ve missed the earlier parts, click here for the second part on how the differences regional markets impact M&A activities; and, click here for the third blog on five things consulting firms must know to thrive in Asia-Pacific. To download the Equiteq Global Consulting M&A report – the most comprehensive publicly available study of the knowledge-intensive services industry – click here.
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