Overseas bidders are making a comeback as travel and familiarity with virtual meetings increases dealmakers’ comfort levels, says Grant Thornton’s national managing principal for M&A, Elliot Findlay. “As much as business travel is limited, deal people are still getting together,” Findlay says. “We’re seeing a re-emergence of international buyers.” A fresh source of demand in an already crowded M&A marketplace could be just what the rally needs to continue.
“I think what happened during Covid is everyone became more insular, there wasn’t travel,” Findlay explains. The need to execute deals eventually prompted an often-hailed shift to digital communications that has since made international relationship building easier than ever.
“I feel like it’s very natural to speak on this medium,” says Findlay during a virtual interview with Mergers & Acquisitions. “And I’d be like, ‘If you’re not on video something’s wrong.’ I find that M&A work was very U.S. -based and what we did see was the reemergence of international buyers travelling.”
The shift in buyer activity comes on the back of the release of Grant Thornton’s M&A Pulse Survey, which found that M&A professionals expect an already buoyant market could rise still higher. Deal volume and value could grow, especially in technology, insurance, retail, and hospitality.
The latter two sectors might provoke surprise, but defensive M&A and distressed deals are likely in these sectors, Grant Thornton writes in the report.
Alongside further deal activity, survey respondents also expect increased need for contingent payments. Earnouts once used to insulate buyers from pandemic-related risks are now being employed to de-risk supply chain and labor shortage issues, Findlay previously told Mergers & Acquisitions. Read more on that subject here.