December is the time when Christmas shoppers make their wishes come true, splurging on the deals they have eyed for months. Dealmakers typically get into the shopping spirit leading up to the holidays, with December traditionally being one of the busiest months of the year for M&A, averaging USD 387bn in value each year since 2015.
But with only two weeks to go until 2023, this December will buck the trend with just USD 121bn in deal value so far, according to Mergermarket data. Amgen’s USD 28bn bid for Horizon Pharma has only just landed in bankers' stockings, but even as the largest healthcare deal of 2022, it won't be enough to fill their boots.
There is a sense among dealmakers that the deflated deal values we have this seen this year signal a reset in the market. As we become accustomed to the rising rates environment and adjust to the new normal in 2023, both M&A and ECM could see the path towards recovery.
In addition to rising rates, a key aspect of our new normal will be more regulatory scrutiny, and private equity too can expect increasing pressure in this area.
Aldrin Brown writes that the crackdown on interlocking directorates by the US Department of Justice’s Antitrust Division reflects concerns over private equity. The DOJ was reportedly investigating whether Blackstone [NYSE:BX], Apollo Global Management [NYSE:APO] and KKR & Co. [NYSE:KKR], leverage overlapping board seats to influence corporations, in violation of US antitrust laws back in October.
Staying with Blackstone, Dane Hamilton writes that one of its portfolio companies, The Center for Autism and Related Disorders (CARD), one of the largest US autism treatment providers, has been interviewing bankers about strategic alternatives that may include a sale of all or part of the business.
Within healthcare, healthtech is an area of strong interest across regions. European tech investor One Peak Partners is planning to make four to six growth investments per year in B2B software companies in Europe and Israel, co-founder Humbert de Liedekerke Beaufort told Ero Partsakoulaki. The investor is interested in healthcare tech alongside segments of infrastructure software, ESG software, cybersecurity, DevOps, business intelligence and data analytics.
Environmental priorities will remain at the top of investors' wishlists for 2023. The owner of Surovina, a Slovenian waste management services provider, is in bilateral talks over a sale to Hamburger Recycling, a unit of Austrian paper and packaging group Prinzhorn, report Orsolya Turi and Boris Maleshkov. The advanced talks are suggesting a deal value in the EUR 90m-EUR 100m range. In China , Jennifer Zhang writes that U Power [You Pao Ke Ji], a privately held Chinese electric vehicle (EV) maker, is seeking domestic and foreign investors to bolster its R&D capabilities and production. The Shenzhen-headquartered company hopes to raise around CNY 300m-CNY 500m (USD 42.97m-USD 71.61m) via a minority stake sale as it looks to close a deal over the next few months.
In South Korea, Jenny Lee reports that the imminent adoption of International Financial Reporting Standard (IFRS) 17 at the start of 2023, and ensuing capital requirements, has triggered a spate of M&A and capital-raising among small to mid-sized insurance firms. Equity/hybrid issuance and idle asset sales are being accelerated ahead of the new year, while some companies are moving fast to refinance.
Rebecca Wenzel interviewed Justin Holland, the CEO of HealthJoy, a Chicago-based healthcare navigation platform, who may raise crossover funding next year, ahead of a public debut. Right now, HealthJoy’s goal is to be profitable, and then it may decide to raise a large crossover funding round in the USD 100m to USD 200m range within the 2023 calendar year to accelerate growth, Holland said.
For dealmakers in Asia anticipating further activity in Hong Kong and China as COVID restrictions relax further, Kimberly Jin and Danni Sun analysed the process and outcomes of the new critical check for overseas listings for Chinese companies from the Cyberspace Administration of China’s (CAC) cybersecurity.
Even if this year's M&A tree isn't chock-full of gifts as it has been in previous years, there are signs that companies are looking past it towards a more plentiful 2023 in "the new normal".
Lucinda Guthrie
Executive Editor, Mergermarket
Lucinda.Guthrie@iongroup.com
News & analysis
DOJ focus on Interlocking directorates reflects ‘shot across the bow’ at PE – Analysis
NEWS ANALYSIS AMERICAS
The crackdown on interlocking directorates by the US Department of Justice’s Antitrust Division is forcing public companies to scrutinize their compliance with Section 8 of the Clayton Act, and hints at the agency’s broader ambitions to...
Blackstone’s Center for Autism and Related Disorders interviewing bankers for strategic review, sources say
BREAKING NEWS AMERICAS
The Center for Autism and Related Disorders (CARD), one of the largest US autism treatment providers, has been interviewing bankers about...
VC Spotlight: One Peak seeks B2B software investments in Europe, Israel with USD 1bn fund
INTERVIEW EMEA
European tech investor One Peak Partners is planning to make four to six growth investments per year in B2B software companies in Europe and...
Surovina in advanced sale talks with Hamburger Recycling - sources
BREAKING NEWS EMEA
The owner of Surovina, a Slovenian waste management services provider, is in bilateral talks over a sale to Hamburger Recycling, a unit of...
EV maker U Power seeks investors to bolster R&D, production – sources
BREAKING NEWS APAC
U Power [You Pao Ke Ji], a privately held Chinese electric vehicle (EV) maker, is seeking domestic and foreign investors to bolster...
Raising standards: financial reporting change has South Korean insurers in a frenzy
DATA INSIGHT APAC
South Korea’s insurance market is getting busy. The imminent adoption of International Financial Reporting Standard (IFRS) 17 at the start....
HealthJoy may raise crossover funding next year, ahead of IPO in 2025, CEO says
INTERVIEW AMERICAS
HealthJoy, a Chicago-based healthcare navigation platform, may raise crossover funding next year, ahead of a public debut, said...
China CAC’s cybersecurity reviews of overseas IPOs typically lead to three outcomes – sources
NEWS ANALYSIS APAC
The Cyberspace Administration of China’s (CAC) cybersecurity review on Chinese companies’ overseas listings typically ends up with three...
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