More than 50% of Brazilian companies plan mergers and acquisitions in 2022

Data from the ABES/BR Angels/Solstic Advisors Survey: perceptions of mergers and acquisitions in the current Brazilian market scenario show that mergers and acquisitions are seen as promising by 86% of entrepreneurs and senior executives in Brazilian companies. And more: 50.5% intend to carry out a transaction in the next 12 months.

The survey was carried out by the Brazilian Association of Software Companies (ABES) in partnership with the BR Angels Smart Network, an investment-angel, and Solstic Advisors, which specializes in mergers and acquisitions and in fundraising. The survey was conducted in July 2021 and had the participation of 105 high-ranking entrepreneurs and executives from Brazilian companies in segments such as technology, services, education, retail, industry and agribusiness.

When taking a merger and acquisition action, most respondents (63.8%) say they evaluate the business model of the company that will be the target of the negotiation. Other aspects considered are scalability (52.4), innovation (50.5%), financial health (43.8%), team and leadership (41%), market value (33.3%), organizational culture (27 .6%) and governance (25.7%).

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Among the reasons that lead respondents to consider the transaction, in the first place is the possibility of increasing market share (42.9%). Other reasons include the incorporation of technologies (35.7%), the acceleration of the digital transformation (21.4%), the inclusion of talents (21.4%), the entry into new markets (21.4) and the gain competitiveness (14.3%).

Another important piece of information is that 13.3% of respondents claim to have participated in such operations in the last two years. In this group, 50% are from the information technology market, 14.3% from the retail sector and 14.3% from the financial sector. “Low interest rates and high liquidity boosted stock exchanges and heated up the scenario,” says Flávio Batel, founding partner and CEO of Solstic Advisors.

Orlando Cinta, founder and CEO of BR Angels, says startups have a lot to gain from the increase in merger and acquisition operations in the country. “The scenario is especially promising for startups and businesses that bring innovative and complementary solutions in different markets”, he highlights.

Technology is featured

According to the study, the sectors that are most likely to carry out mergers and acquisitions in the coming months are technology (66%), e-commerce (5.7%) and logistics (5.7%). Most respondents (35.8%) intend to invest between R$ 1 million and R$ 5 million in acquisitions.

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Another 17% plan to invest between R$5 million and R$15 million, while 9.4% consider amounts between R$30 million and R$50 million. Only 3.8% say they should invest more than R$50 million. The remaining 30.2% preferred not to disclose this data.

The study also points out that mergers and acquisitions should be highlighted over the next 24 months. Almost 24% of respondents intend to invest in or acquire start-up external businesses. The majority (75.2%), however, still does not have a structured area in the company. Of the 24.8% who do, 10.5% use an external department, 7.6% have the structure internally and 2.9% have a dedicated structure.

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