2017 has been on for a few months now, and it is time to review the state of things.
In the M&A sector, 2016 was a rather good year, as recent published statistics demonstrate, even considering that the overall deal value and closed deals was about 26% below 2015’s values (NYT, 03/01/2017).
According to the sources, nearly 45,000 M&A deals have been closed in 2016 with an overall value of nearly $3.6 trillions. That is to say, a respectable average of $78 millions per deal.
In Europe there is this shared impression that all those high value deals are exclusively reached by Tech companies or by the so called Unicorns – Tech startup which are valued at over 1B$ in an IPO. The truth is, while tech companies certainly make the headlines, they only amount, in 2016, 15% of all M&A and IPO of tech startups has been very low.
In fact, non-tech sectors such as Oil & Gas, Chemicals, Pharmaceutics, Services, Food & Retail… have been the stage for some quite high evaluations. Look for instance at the recent Pet Retail deal of Arcaplanet or the second MBO of Doc Generici.
Hence, the ever popular question shareholders are asking themselves: “Shall I necessarily have to convert my business into a tech based one to have a chance to access financing resources and finance my growth ambitions?”
Internet based and connected business models will, without doubt, influence the way classic non-tech business have been monitored so far. The challenges are huge, especially for small and medium realities that see the IoT, cloud services and such concepts invading their environment for energy supply, accounting, tax registration, std Admin, international transactions amongst others. Not everyone is able or organized to integrate the impact of those new environments. Another aspect of this challenge is the invasion of platform-type business models that tend to totally change the dynamics of a sector putting into great difficulty incumbents often not ready to answer this new way of competing.
ACTISS recent experiences have demonstrated that non-tech companies still have a big appeal to investors and can fulfill their growth ambitions without necessarily switch toward pure tech models. Having made the necessary efforts to integrate the impact of technology on their business by either building up their own Tech model internally – with temporary selected executive resources – or by acquiring related service Tech start-up to fulfill identified gaps, those companies have put themselves in a really attractive competitive position and developed high value added alliances and internationalization paths for future growth.
Director of ACTISS Italia