Best of LinkedIn: M&A Insights CW 35/ 36

00:00:00: provided by Thomas Allgaier and Frenus, based on the most relevant posts on LinkedIn about M&A insights in CW three, five, three, six.

00:00:06: Frenus is a BDB market research company supporting M&A consultancies with the marketing competition perspective, for example, in commercial due diligence.

00:00:14: This edition is brought to you by our partner Deer Room.

00:00:16: Don't miss out their buyer led M&A summer.

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00:00:33: Welcome to the deep dive.

00:00:34: Today, we're digging into the top M&A trends and insights buzzing on LinkedIn during calendar weeks, thirty five and thirty six.

00:00:40: We're talking strategic scale plays, AI, shaking up deal making, and, you know, the really hard-nosed execution side of things.

00:00:47: Our goal here is to figure out what the experts are saying are the real keys to granting durable value right now.

00:00:52: Exactly.

00:00:53: It's about filtering out the noise, isn't it, and finding that signal.

00:00:56: We've seen a really clear focus emerging on, well... operational integration, getting those regulator narratives right, and just a very disciplined approach to deploying capital.

00:01:06: These are the things that seem to separate real long-term value from just, you know, the fleeting headlines.

00:01:13: So this is really for those of you in M&A, PE, VC, and consulting who need to stay ahead.

00:01:19: Okay, so let's jump right in.

00:01:20: Theme one, market sentiment.

00:01:22: How's it shifting?

00:01:23: What's actually happening with deal flow and, crucially, valuations.

00:01:27: It feels like a bit of a mixed bag out there.

00:01:29: It absolutely is.

00:01:30: And what's really interesting is this, fewer deals overall, but the value of those deals.

00:01:34: It's actually climbing.

00:01:35: Jennifer Gallagher pointed this out, lower volume, yeah, but more high value strategic acquisitions, especially in hot areas like AI and healthcare.

00:01:42: Ah, okay.

00:01:43: So quality over quantity is becoming the theme.

00:01:46: Seems like it.

00:01:47: Brian Kay Grant echoed that saying, global M&A value jumped to twenty two percent in the first half of twenty five, even while the deal count dropped significantly.

00:01:55: And Frank Akila.

00:01:56: You just put it bluntly.

00:01:58: Bigger deals are back, particularly, you know, those five billion dollar plus ones.

00:02:01: That's

00:02:01: quite a shift.

00:02:03: So not just growth for growth's sake anymore.

00:02:05: What's driving this move towards bigger, more strategic plays now?

00:02:10: Well, it really boils down to a stronger strategic focus.

00:02:12: Lucy Stapleton and Stephen Jones from PWC UK, they highlighted this pivot towards larger deals driven by long term transformation goals, not just adding a bit more revenue here and there.

00:02:22: Right.

00:02:23: Transformative bets.

00:02:24: Exactly what Christopher Kumar observed.

00:02:26: He said, capital's flowing into transformative bets, not scattershot growth.

00:02:30: It's about hitting very specific high impact target.

00:02:33: Yeah, makes sense.

00:02:34: So it's the why behind the deal that's changing.

00:02:36: Is this trend the same everywhere or are we seeing like regional pockets doing their own thing.

00:02:41: Oh, definitely regional nuances.

00:02:44: While the overall mood might be cautious, local factors are creating these sort of micro climates.

00:02:49: Like Warwick face pointed to Queensland's M&A market being pretty resilient with tech and real estate leading there.

00:02:55: Interesting.

00:02:56: And Martin Bruckner noted resilient growth across different regions too.

00:03:00: Japan's got activism fueling deals.

00:03:02: Australia's consolidating resources.

00:03:05: It's not uniform at all.

00:03:06: And valuations within all this.

00:03:08: Are certain sectors holding up better or are people valuing deals differently now?

00:03:13: Yeah, Kim Kowalski mentioned wealth advisory.

00:03:15: saying evaluations there are resilient for the high-performing firms shows confidence in well-run businesses, right?

00:03:21: And Cathal Deasy flagged something else.

00:03:24: More equity-funded deals up to maybe twenty-three percent of total activity.

00:03:28: Equity-funded, huh?

00:03:29: Why is that?

00:03:30: Well, it seems the costs of equity and debt are getting closer.

00:03:33: And maybe more importantly, the market's reacting better when companies use stock for deals.

00:03:37: So it signals maybe a bit more acceptance of equity as currency, perhaps even a flight to quality assets.

00:03:42: OK, that's a big deal.

00:03:44: But is everyone agreed on how to actually value these things, especially when things feel less predictable?

00:03:50: Not entirely.

00:03:51: And this is where Ziggy Frankenfeld offered a really important warning.

00:03:54: He said, look, DCF discounted cash flow, it's theoretically sound, right?

00:03:59: But for smaller M&A deals, it can be misleading.

00:04:02: Forecasts are shaky, earnings unstable.

00:04:05: So

00:04:05: don't rely on it solely.

00:04:07: Exactly.

00:04:08: He advises using as a cross check, not the main basis.

00:04:11: Stick with market multiples for smaller deals, he suggests.

00:04:14: It's that gap between textbook theory and messy reality.

00:04:18: That's a crucial distinction.

00:04:19: And speaking of messy reality, what about actually getting deals done?

00:04:22: Are they closing as often?

00:04:23: That's a concern.

00:04:24: Kai Hesselman highlighted a pretty significant drop in LOI letter of intent to closure rates, down from maybe eighty-five percent to around sixty percent.

00:04:33: Wow, that's

00:04:33: quite a fall.

00:04:34: why.

00:04:34: Seems to be cautious buyers, longer diligence periods, and ongoing financing hurdles, especially hitting the smaller deals hard.

00:04:41: He really emphasized needing honesty, realistic expectations, and getting financing sorted early.

00:04:46: Deal certainty is becoming a real premium.

00:04:49: Okay, so you've got these bigger deals, regional variations, new valuation wrinkles, lower close rates.

00:04:56: How are deal makers coping psychologically?

00:04:58: Are they getting hesitant?

00:04:59: or finding new angles.

00:05:00: Well, despite the uncertainty, it seems many are finding ways to actually use these shifts.

00:05:05: Kristen Stewart mentioned M&A leaders leveraging these changing norms for value creation.

00:05:10: Stephen Jones at PWC UK advises boldness, clear vision, confidence, saying U.J.

00:05:16: deal conditions are still strong despite lower H-one volumes.

00:05:19: So not hiding under a rock them.

00:05:21: Apparently not.

00:05:22: Eric Swedenberg even called the summer M&A market unusually hot.

00:05:25: thanks to stable financing and maybe some pent up demand.

00:05:29: It really feels like for those who are prepared and agile, this uncertainty is actually creating unique chances.

00:05:34: Resilience and adaptability.

00:05:35: Got it.

00:05:36: And I think Ryan Hall's had some specifics on the RIA registered investment advisor space too.

00:05:40: He did.

00:05:41: Ryan Hall's pointed to three key trends there.

00:05:45: More PE backed platforms, buying up firms, sellers waking up to the high valuations they can get.

00:05:50: And this is interesting, buyers focusing more on culture and growth, not just the raw EBITDA number.

00:05:56: So it paints a picture of shifting priorities where strategic fit and long-term potential are really gaining traction.

00:06:03: Okay, let's pivot a bit.

00:06:04: Away from market dynamics and towards something really transformative, AI and Delltech.

00:06:09: How are these changing the M&A game?

00:06:11: because it feels like they're adding speed and precision we haven't seen before.

00:06:14: Oh, this is fascinating.

00:06:15: Alon Bonner talked about corporate M&A adopting a VC speed mindset, using AI to massively shrink diligence timelines, change how deals are sourced.

00:06:24: What it means for you listening is you need conviction much early in the process.

00:06:27: It's a whole new pace.

00:06:28: Exactly.

00:06:28: And it's about blending what you already have with these new tools.

00:06:31: Brad Herman discussed how winning strategies now combine existing soft software as a service with agentic and generative AI.

00:06:39: Basically, AI that can act on its own and create stuff.

00:06:42: Companies are using M&A to get access to data and acquire these new AI capabilities.

00:06:46: Right.

00:06:46: Bridging those data modes.

00:06:48: And Carolyn Seibel put it really well.

00:06:50: It's not M&A or AI.

00:06:51: It's M&A and AI.

00:06:53: The idea is AI can generate profits to fund deals.

00:06:57: And deals deliver the capabilities to make AI truly work.

00:07:01: They feed each other.

00:07:02: That synergy makes total sense.

00:07:04: It's not just buying an AI startup.

00:07:05: It's weaving AI into the core strategy.

00:07:09: Marcus Wagner had a good example of this, didn't

00:07:10: he?

00:07:11: He really did.

00:07:12: He pointed to Microsoft's smaller strategic buys, things like Power BI, Xamarin, semantic machines.

00:07:19: These aren't the huge headline deals.

00:07:21: They fill specific gaps, enabling bigger strategic moves later.

00:07:25: They build the foundation, and then larger deals can leverage that.

00:07:28: It's quite clever, really.

00:07:30: So you're

00:07:30: saying AI isn't some future thing in M&A anymore?

00:07:33: here now fundamental.

00:07:34: Absolutely.

00:07:35: Jay Preston Parker said AI is now the foundation of corporate M&A, not just the next frontier.

00:07:40: It changes how deals are assessed and really critically how they're integrated to actually deliver performance.

00:07:46: Teams need to know how to bring this tech inside and make it fit their strategy.

00:07:50: It's table stakes now.

00:07:51: And practically speaking, beyond the big strategy, how's AI helping automate the grunt work?

00:07:56: removing friction.

00:07:58: We saw examples like Greg Grubly showcasing Loyo's Buys Financial Management Suite.

00:08:04: using Power BI workflows and automation to streamline buy-side diligence.

00:08:08: Cutting down the manual slog, it's a real-world example of Dell Tech making everyday M&A tasks faster and hopefully more accurate.

00:08:16: With AI becoming so central, I guess the market for AI infrastructure itself must be booming.

00:08:21: Oh, definitely.

00:08:22: Tim Bird noted that booming market and it raises questions, right, about investor confidence, how M&A advisors need to adapt, the pace is just so fast, advisors need to be quicker, more precise in their thinking, may be more specialized.

00:08:34: And

00:08:34: for companies trying to get ahead, how does AI fit into the bigger picture of competitive advantage?

00:08:39: Is it just another tool?

00:08:41: Seems more fundamental than that.

00:08:43: Waldir Allatrist, referencing work by Matthew McGonagall and Elizabeth Kasky, listed using AI for competitive advantage as one of five key actions for boosting shareholder return from M&A.

00:08:53: It's tied into strategic planning, better decisions, team collaboration, communication.

00:08:58: AI is sort of woven through it all for creating that lasting value.

00:09:02: Okay,

00:09:03: let's shift gears again to what many call the real battleground where deals live or die.

00:09:08: Post-merger integration, PMI.

00:09:11: It's where the theory hits reality, and it's notoriously tough.

00:09:14: The sources seem unanimous on its importance.

00:09:16: Absolutely, and what's striking is the agreement that PMI isn't something you figure out later.

00:09:21: It is the main event.

00:09:22: Kisan Patel put it sparkly.

00:09:24: Integrated needs to be a hundred percent of someone's job, not ten percent of everyone's job.

00:09:28: And he says, write the S one on day one, basically, define the combined company's success story before you close.

00:09:34: Right.

00:09:34: Have the plan locked down.

00:09:35: And Abhishek Mattel echoed that signing the deal is just the starting pistol.

00:09:39: PMI is where most deals succeed or fail.

00:09:41: The deal isn't truly done until integration works.

00:09:43: Makes total sense.

00:09:44: A great deal on paper means nothing if the integration tanks.

00:09:48: So what about leadership's role in steering through this?

00:09:50: It sounds critical.

00:09:51: Absolutely.

00:09:51: absolutely pivotal, like the North Star.

00:09:54: Charlie Riggs highlighted data showing over seventy percent of mergers fail when leaders step back after the deal.

00:10:00: CEO presence is vital for redesigning things and communicating that vision.

00:10:05: Thomas H. Kessler added that for sea levels, it's about strategic reflection, clear communication, and importantly, celebrating early wins to build that crucial momentum.

00:10:14: Eat morale

00:10:14: up, yeah.

00:10:15: And Kristoff Taiman's hammered this home too, noting nearly seventy percent of failures are down to people and culture.

00:10:21: or clashes.

00:10:22: Leaders need clarity, empathy, and that strong strategic vision throughout.

00:10:26: So huge emphasis on people and culture, not just the technical bits.

00:10:29: How does operational alignment fit in getting the actual businesses working together?

00:10:34: Caroline Chambers focused on this in asset management, saying operational integration is key for profit.

00:10:40: From boosting the front office to harmonizing the middle and back office, she laid out practical steps like tough operational due diligence and designing the target operating model early.

00:10:51: Nathan Sanders agreed, stressing planning from day one, clear roles, cultural alignment.

00:10:57: M&A isn't a shortcut, it demands discipline.

00:10:59: Okay, but merging two companies means merging two sets of tech, right?

00:11:03: How do you deal with all the overlapping systems, the tech debt?

00:11:05: That sounds like a nightmare.

00:11:07: It can be.

00:11:08: Vijay Veldor had a provocative take.

00:11:10: Integrations often fail because of redundant, good-enough systems.

00:11:13: nobody wants to kill off, his idea.

00:11:15: Deploy an LLM-based application intelligence engine in AIE right in week one.

00:11:20: To automatically map systems, classify them, flag overlaps, essentially create a kill list for redundant tech.

00:11:26: Kill

00:11:26: list, I like that.

00:11:27: Direct.

00:11:28: Pretty direct.

00:11:29: And Toth Maria Sarolta pointed out ERP systems are like the digital spine.

00:11:33: merging them is way more than just a tech task.

00:11:36: Danny Davis also stressed asking the right functional about people, synergy plans, how to ramp up sales effectively.

00:11:43: Right.

00:11:44: Beyond the operational tech, there's the whole financial and accounting integration side.

00:11:48: Massive risks there.

00:11:49: if it goes wrong.

00:11:50: Huge risks.

00:11:51: Katrina Nachi advised mapping the chart of accounts during diligence to spot risks early, avoid surprises.

00:11:57: Michael M. Landman Carney used historical examples, like HP's autonomy write down, to show how accounting integration failures lead to massive losses.

00:12:06: Accurate financial data is paramount.

00:12:08: Deepak Hay listed the CFO's headaches.

00:12:11: systems, actually realizing synergies, financial controls.

00:12:14: Lindsay Fluke also noted CFOs are very worried about integration pitfalls.

00:12:18: They're actively looking for advice.

00:12:19: Okay,

00:12:19: so we've covered leadership, operations, tech, finance, but you mentioned people and culture where seventy percent fail.

00:12:26: How do you actually integrate people?

00:12:28: This is the hardest part probably.

00:12:29: Rachel Platt talked about identifying culture carriers, not just champions, but people who live the values daily.

00:12:35: They're vital translators in early warning systems for friction.

00:12:39: Desanjita emphasized size, radical honesty, acknowledge uncertainty, encourage feedback, even admit mistakes, build trust, avoid that white space where assumptions fester.

00:12:50: That makes sense.

00:12:51: Handle the human side carefully.

00:12:52: And Amar Zaydi looked at this in insurance, focusing on customers, brokers, employees, all key stakeholders whose experience matters hugely in integration.

00:13:01: Beyond these big themes in PMI, any quick wins or overlooked areas that can make a difference?

00:13:05: Yes,

00:13:05: a couple came up.

00:13:06: Tuluhan Erdemi highlighted vendor consolidation.

00:13:09: low drama, potentially high impact on cash, fast.

00:13:13: Should be a day one priority, he argued.

00:13:15: Often gets pushed back, but it's a quick synergy hit.

00:13:18: Good

00:13:18: one.

00:13:19: What about physical stuff like offices?

00:13:20: Ben Bailey pointed that out.

00:13:22: The classic pitfall, discovering post deal.

00:13:24: you've got two HQs on long leases.

00:13:25: Ouch, his point.

00:13:27: Get the corporate real estate team involved early to avoid these costly surprises and fine savings.

00:13:32: Easy to overlook until it's expensive.

00:13:35: Finally, on PMI, is it the same challenge everywhere, or does region matter?

00:13:40: Principles are universal, but context matters.

00:13:43: Hassan al-Alami stressed how crucial PMI is for Saudi Arabia's growth, tied to Vision, so it's a global challenge, but you adapt it locally.

00:13:51: Alright, let's shift focus one last time.

00:13:54: To the external forces.

00:13:55: really shaping deals now, talking regulatory hurdles, antitrust getting tougher, the sheer complexity of cross-border deals, and just different market structures.

00:14:03: These aren't side issues anywhere.

00:14:04: they're often central.

00:14:05: Yeah, the outside world pressing in.

00:14:07: Alia Schweiger and Guillaume Duquillat from iconic partners discussed EU merger guidelines.

00:14:12: Their point was, don't just look at market share numbers.

00:14:14: They argued for assessments based on actual effects on competition, innovation, efficiencies, a more nuanced view.

00:14:20: And Guillaume Duquillat's recommendations went further.

00:14:23: clearer rules for dynamic markets, vertical impacts, even looking at sustainability and labor effects.

00:14:30: It's pushing for a much broader review.

00:14:33: Kaluntam added that regulators now want to talk directly to business execs, senior leaders explaining the real strategy, the incentives that can make or break a deal's approval.

00:14:43: It's about the why.

00:14:44: So much more than just filing the paperwork and all this extra scrutiny.

00:14:48: It's making deals take longer.

00:14:49: Yeah, definitely.

00:14:51: The M&A Trends and Insights summary mentioned timelines stretching out because of politics and regulation.

00:14:55: Franca Killen noted U.S.

00:14:57: merger probes now often go past twelve months.

00:15:00: This just underlines the need for even earlier, more robust preparation.

00:15:03: You need that regulator-ready story from the get-go.

00:15:06: And cross-border deals just add another layer of headaches on top of regulatory stuff.

00:15:10: Oh yeah.

00:15:11: Alexis Chevalier called transfer pricing in cross-border M&A an overlooked battleground.

00:15:16: Huge impact on deal economics compliance needs early alignment.

00:15:21: or it can really bite you later.

00:15:23: Yanis Kokalis also talked about European cross-border banking M&A still being really tough, long approvals, trapped capital, hindering the whole sector's strength.

00:15:32: The cross-border details are critical.

00:15:34: It sounds like where you do the deal matters hugely.

00:15:37: How different are things between, say, the UK and the US?

00:15:40: Quite different, according to Eva Davis and Nick Usher.

00:15:43: UK deals often prioritize certainty minimal conditions using that locked box price mechanism where the price is fixed at signing.

00:15:50: Typically more conditions, post-closing price adjustments, more flexibility maybe, but more room for post-signing hygling.

00:15:55: Plus things like disclosure standards, how warranty and indemnity insurance works, they differ significantly.

00:16:00: It affects risk, strategy, everything.

00:16:03: So what does all this mean for you listening?

00:16:05: We've seen M&A isn't just about that first big strategic splash or the deal announcement anymore, is it?

00:16:11: It seems it's really about the ongoing ability of organizations to adapt, to integrate properly and just keep finding value in this constantly changing world, often using tools like AI and crucially never forgetting the people involved.

00:16:23: This shift suggests that, well, deep preparation, disciplined execution, being flexible.

00:16:29: These aren't just nice to haves, they're basically the entry ticket to the M&A game now.

00:16:33: So the question for you is, what part of this evolving M&A landscape will you focus on most in your own strategy moving forward?

00:16:40: If you enjoyed this deep dive, new additions drop every two weeks.

00:16:43: And do check out our other additions covering private equity, venture capital, and strategy and consulting.

00:16:48: Thank you for joining us.

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