Breaking down recent M&A activity

James Marlay

Livewire Markets

Avoca Investment Management has produced analysis on recent M&A activity. The analysis classifies deals that have been launched over the past two years into three categories. These are listed as 1) highly synergistic in-market merger (E.G. TPG bid for IINet) 2) global in-market synergistic (E.G. Expedia bid for Wotif) and 3) nil synergy opportunistic or essentially some sort of timely value play. Their review, as highlighted in the chart below, shows that 7 out of 13 deals over the past 2 years fall into the classification of nil synergy opportunistic. Effectively bidders targeting stocks during periods of sustained weakness and not excluding ‘out of favour sectors’. Their full report (VIEW LINK) provides more detail concluding that their focus on stocks with through cycle value will increasingly see them coincide with what corporates and PEs find compelling. You rarely hear investors say it is possible to plan for M&A activity, this discussion does certainly go a step further in positioning a portfolio for M&A activity.


MORE ON



1 topic

1 stock mentioned

Co Founder
Livewire Markets

Livewire is Australia’s #1 website for expert investment analysis. We work with leading investment professionals to deliver curated content that helps investors make confident and informed decisions. Safe investing and thanks for reading Livewire.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.