2017 M&A trends

Steven Einstein, Equiteq’s newly appointed Vice Chairman, offers his thoughts on the trends experienced in the M&A market in 2017.

Despite a politically-charged global environment and the increasing number of regulatory hurdles, the high levels of M&A experienced in 2016 have been resilient in 2017 and we have also seen the continuation and evolution of a number of trends.

Looking at M&A broadly, we are seeing that regional differences are no longer as prevalent. In an increasingly global economy, acquirers from Europe and North America alike are taking an active role, canvassing the global market place for M&A opportunities that support their non-organic growth ambitions.

Emerging Technologies

In the last twelve months, one of the biggest shake-ups affecting all sectors has been the emergence of technologies centered around cognitive computing and artificial intelligence. There are a growing number of consultancies looking to build competencies around augmented reality, predicative analytics and big data, which many see as integral to their vision of the future. For example, a recent survey of senior executives by Accenture showed that 85% will invest extensively in AI-related technologies over the next three years[1].

These are technologies that I expect we will take for granted in five to ten years, so it’s increasingly important for businesses to embrace them now in order to offer a unique consulting value.

Firms that choose to embrace these emerging technologies and offer solutions anchored in advanced analytics and artificial intelligence have the potential to consult on how big data can be used to drive insights that predict future consumer behaviors. The ability to consult around that effectively is a hugely valuable asset.

Intellectual Property

M&A activity has been dominated by the management consulting sector this year and consolidation does not appear to be on the slowdown. In Q3 of 2017, there were 207 deals in the management consulting sector, a 7% increase from Q3 2016. Firms with a strong foundation of intellectual property (IP), such as unique processes, methodologies and proprietary data sets are being swept up by larger companies that are looking to add to their own differentiation.

Digitization

When thinking about the media, there has been a distinct shift in how people consume information. While the traditional media platforms, print and broadcast, still play an important role, the media world has experienced a huge upheaval in the form of digitization. In its 2017 Trends Report, Edelman Digital found that weekly share of time spent watching video on mobile devices has grown by 85% from 2010 to 2016, while fixed screen consumption has decreased by 14%[2].

For media firms, digital platforms cannot be ignored as people across the world are getting so much of their news and advertising over social media through their mobile phones. Successful firms will be those that craft a strategy where their messaging and content is spread across digital platforms in a way that is complimentary to more traditional media.

Some truly successful strategies are centered around targeting specific demographic groups, an ability offered by digital medians such as podcasts and social media. The metamorphosis of this industry will continue as agencies try to provide a consistent user experience across a multiplicity of channels.

Targeting is a crucial element of this journey, you have to look at the demographics you are trying to reach and appeal to them directly. Within these demographics, there are micro segments that are important to consider as well.

[1] Accenture, 2017, ‘Vision for 2017’, p23, https://www.accenture.com/t20170530T164033Z__w__/us-en/_acnmedia/Accenture/next-gen-4/tech-vision-2017/pdf/Accenture-TV17-Full.pdfla=en?la=en

[2] Edelman Digital, 2017, ‘2017 Trends Report’, p5, https://edelmandigital.com/wp-content/uploads/2016/12/2017-Edelman-Digital-Trends-Report.pdf

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One thought on “2017 M&A trends

  1. Pingback: Knowledge economy M&A activity was solid in 2017, with digital disruption driving demand and premium valuations | Equiteq Edge

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