What makes for an M&A target?

Anand Vasagiri, Co Portfolio Manager at the Paradice Small Mid Cap Global Fund, shares his views on the attributes of companies that have been the targets of takeover activity. While investments are never made with the expectation of M&A outcomes The Paradice Global portfolio has seen 14 companies taken over in the past few years. The prices in most cases have been above the assessment of fair value providing an exit with attractive returns. Anand says focusing on companies with strong franchises, stable cash flows and strong management has aligned their interests with those of likely acquirers whether they are private equity firms or strategic industry buyers. Anand highlights the current environment is conducive to M&A activity; "Especially when rates are low and growth is anaemic in many parts of the world it becomes a lot cheaper to buy the growth." Click here