2013 YTD Merger Acquisition Transactions Forecast

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2013 YTD Merger Acquisition Transactions Forecast commentary

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2013 YTD Merger Acquisition Transactions Forecast

  1. 1. Ephor Group | 1-800-379-9330 | www.ephorgroup.com | 24 E. Greenway Plaza Suite 440 | Houston, TX 77046YTD 2013 Mid-Market M&A Transaction Forecast
  2. 2. 2013 M&A Landscape ForecastWe anticipate M&A activity to be quite robust over the year and a half as companiesconsolidate to become solution providers and fill their product and servicegaps/strategies.Mergers and acquisitions in the B2B software, information technology and BPO servicescontinued at a fast clip in Q1 2013 as the number of deals rose over 2012 and 2011levels.Strategic acquirers have been focusing on complementary acquisitions less than $100Mand seeking complimentary assets/capabilities. Distressed, stagnant businesses withoutaccess to capital (stuck in the growth capital liquidity trap) are also available.For companies with less than $10 million in EBITDA there is a shortage of financialacquirers as private equity firms have focused predominantly on companies with $10million in EBITDA or more.The bottom line is that the race is on for both IP and market share dominance as BPOsand solution providers as well as enterprise software vendors look to fill gaps in theirproduct and service strategies.© 2013 Ephor Group. All Rights Reserved. 2
  3. 3. YTD Transaction Summaries Available for the Following:1. BPO Backoffice2. BPO Frontoffice CRM & Contact Services3. IT Management and Managed Services Providers4. HR, HCM, HRO, HR Services & Staffing, & Workforce Management© 2013 Ephor Group. All Rights Reserved. 3
  4. 4. 2013 Useful Capital Growth Options• Credit facilities will be almost exclusively asset based lending only.• Venture continues to ride the wave of “Consumerism.”• Access to growth capital for branded sector leaders only.• Private equity and mezzanine lenders remain eager to put capital to work with transaction structureand pricing relatively flexible.• M&A corporate development will continue to be strong although deal valuations will be limited andcapped. The M&A outlook will remain strong, including deal count volume as cash-rich strategicsaugment growth and capabilities.1. Strategics Seeking Growth. Conditions are good for an increase in strategic acquisitions in2013. U.S. corporations have built up immense balance sheet firepower, with more than $2trillion of aggregate cash currently earning a minimal return. Given the sluggish economicoutlook, M&A can be an effective tool for lifting the top line and generating marginimprovement through synergies following an extended period of cost controls.2. Private Equity Financial Sponsors will be focused on selling assets due to pressure to putcommitted capital to work and to generate exits. Financial sponsors evaluating platformacquisitions and add-on deals continue to have in excess of $400 billion in uninvested capitalthat needs to be deployed as well as access to debt at reasonable terms. At the same time,achieving fully valued realizations is a high priority for private equity firms with aging portfoliocompanies.© 2013 Ephor Group. All Rights Reserved. 4
  5. 5. BPO Solutions Provider Forecast→ Shift from labor arbitrage to BPO solutions. Significant expansion of the platform technologysolution.→ Moving data to the cloud.→ Analytics as a Service. For risk management, financial analytics, customer behavior patterns.→ Mobile applications and other technology adoption for remote services.→ Regulatory compliance driving adoption and upgrades.→ Addressable mid-market remains large and under-penetrated→ Solution evolution will drive technology investment and profitability.Top Benefits of a Industry Vertical BPO ConfigurationI. ComplianceII. Preconfigured Industry Solutions for Dashboards, Reporting, Onboarding, & WorkflowsIII. Embedded BI into BPM (embedded analytics and business rules)© 2013 Ephor Group. All Rights Reserved. 5
  6. 6. BPO Solutions Provider Forecast→ Shift from labor arbitrage to BPO solutions. Significant expansion of the platform technologysolution.→ Moving data to the cloud.→ Analytics as a Service. For risk management, financial analytics, customer behavior patterns.→ Mobile applications and other technology adoption for remote services.→ Regulatory compliance driving adoption and upgrades.→ Addressable mid-market remains large and under-penetrated→ Solution evolution will drive technology investment and profitability.Top Benefits of a Industry Vertical BPO ConfigurationI. ComplianceII. Preconfigured Industry Solutions for Dashboards, Reporting, Onboarding, & WorkflowsIII. Embedded BI into BPM (embedded analytics and business rules)© 2013 Ephor Group. All Rights Reserved. 5

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