The pulsating pace of the M&A market dictated business trends between companies in recent years, which saw this type of transaction as an important tool for growth and expansion.
At the end of 2022, the estimate of the financial technology platform Transactional Track Record pointed out that this year should register a growth of around 15% in operations , and one of the reasons lay in the appreciation of the companies that were acquired, resulting in a market movement with higher financial values. After the first quarter of 2023, has this forecast been consolidated? Follow the article.
Offer of IPOs retracted at the beginning of the year
It is impossible to disassociate the mergers and acquisitions market from IPO proposals placed on the market, which are nothing more than public offers for the sale of shares in a given company. With some uncertainties regarding the world economy, there was a retraction in this scenario.
The few situations that occurred were not motivated by a favorable context, but by the need of many organizations to capitalize urgently, especially those that went through some process of financial difficulty, as happened with the Americanas, case widely publicized in the news.
Despite this cooling off in IPO offers, also a reflection of the caution of many companies that do not want to take risks in the midst of so many uncertainties and await confirmation of a drop in interest rates, there are ongoing negotiations for possible mergers and acquisitions between businesses in Brazil and from abroad.
Given this, it is possible to state that the possibilities of the M&A market remain firm and there is a propensity for it to reach new openings, motivating a trend that occurred in the first quarter of the year, when company shareholders prioritized negotiations, giving preference to equity over debt.
Transactions per month: M&A transactions between January and March
Data referring to the mergers and acquisitions market in this first quarter of the year are still very incipient and do not allow for more complex comparisons in relation to 2022.
However, between January and March, we can observe interesting information about the transactions that took place in each of these months, according to data collected by the Fusões&Acquisitions portal , one of the main ones on the subject in Brazil.
Check out the month-by-month overview:
- January: The first month of the year registered 104 operations in Brazilian territory, 39 in the Information Technology sector, which reached the top of the negotiations. It is a higher number than the same period in 2012 (79) and lower compared to January 2022 (141).
- February: The month of Carnival presented a panorama superior to the previous 30 days, with 113 transactions carried out. An interesting analysis to be carried out in this period was the advance of the Financial Institutions and Health Enterprises markets: 10 operations, double in relation to January, and 8 trades compared to 5 in the previous month, respectively.
- March: The numbers for that month are not yet consolidated, but considering the mergers and acquisitions that took place on a weekly basis, we can predict statistics that exceed 85 transactions.
A point of similarity between the first three months of 2023 is the prevalence of the IT market in the lead in the number of operations. The phenomenon of digital transformation promotes this drive and should continue to offer new business perspectives.
This trend was also active in 2022, which accounted for 688 negotiations carried out in this area, according to the Fusões & Acquisitions Portal.
When we talk about this first quarter in terms of values, the month of January moved more than 50 million reais in total. The result was better in February, when around R$64 million was transferred in the overall sum of M&A operations.
What can we expect for the rest of the year?
Despite the more timid start than 2022, mergers and acquisitions remain promising and tend to present good opportunities throughout the year. It is always important to consider that in times of crisis good negotiation opportunities may arise.
There is still a certain insecurity driven by a scenario where the economy has not yet found stability and the possibility of a global economic recession haunts the reality of the strategic planning of many companies.
But, let us remember that in one of the periods of one of the biggest world crises ever faced in our entire history, with the outbreak of the COVID-19 pandemic, it was precisely when the M&A market reached record numbers. Therefore, the adhesion of mergers and acquisitions in unfavorable situations cannot be ruled out.
The engines for new transactions will be the need for companies to be in tune with the technological changes and revolutions that digital media have brought. The search for environmental practices, mainly in line with aspects related to the ESG, should also motivate organizations to be acquired or join together for this purpose.
If you are the manager of a company and understand that the time has come to move one more step forward in your growth, M&A operations are viable paths and should be included in your business plan. Therefore, it is imperative that you resort to the support of specialists in the field and companies that can help to sniff out new opportunities and will provide you with complete advice at each stage, until the consolidation of the business.
