Shaping the Future of M&A
Submitted by Mergermarket, a Partner of M&A Leadership Council
With an increase in demand for digital content, as well as an influx of new advancements to meet these needs, media and technology companies are using M&A as a strategic tool to rapidly grow. Most acquirers are using this tool to enter new market segments, as they realize three options lay in front of them: expand into a new area, be acquired by a larger company, or get left behind in the high-tech modern world.
In a new report, Shaping the Future: Trends in Digital Media and Frontier Technologies M&A, produced by Manatt Digital, a division of Manatt Phelps & Phillips, LLP in conjunction with Mergermarket, senior global executives share their strategies and views regarding M&A in the digital media and technology sectors. The study shows that executives use M&A to penetrate new markets, emerging technologies are gaining positive traction in the market, integration is the most vital and challenging part of M&A and executives consider Scandinavian countries as the leading target for buyers among global opportunities.
Key findings include:
- Emerging technologies, including the Internet of Things, live streaming, wearable tech, artificial intelligence, AR/VR, eSports, and drones, are among the most attractive market segments for acquirers.
- Almost one in two participants see incorrectly evaluating a technology’s importance or potential as the biggest risk in an M&A deal involving the digital media and frontier technology sectors. This is an important finding as the study also found that due diligence for M&A in these sectors is more difficult and complex than it is for other industries.
- The most vital and challenging aspects in conducting due diligence in a potential digital media or frontier technology acquisition are valuing a target’s real assets including data, technology and hard assets.
- Integration is also a vital and challenging aspect of M&A. More than half of respondents found integrating work cultures to be the most significant challenge in the process. Yet only 9% identified planning for potential integration issues in the due diligence phase as a vital activity. This misalignment of priorities highlights the difficulty in optimizing investments and ensuring a successful transaction.
- The findings also showed that Scandinavian countries represent the top cross-border priority for almost one in two respondents, followed by the UK.
Click HERE to view full Report.
