TORONTO, April 16 /CNW/ - Despite the economic downturn, privately held
businesses (PHBs) remain surprisingly resilient in their attitude towards
acquisitions, according to research from the Grant Thornton International
Business Report. 37% of PHBs globally still plan an acquisition in the next
three years, a drop of only 7% from the same study in 2008. Of that 37%, the
proportion planning cross-border transactions has actually increased,
suggesting that international mergers and acquisitions remain on the agenda as
a strategic tool to drive growth.
"M&A is an important growth strategy for well-capitalized privately held
businesses. Almost half of Canadian privately held businesses are looking for
acquisition opportunities," says Andy Langer of Grant Thornton in Canada.
"When compared to last year, the increased number in businesses who anticipate
making an acquisition suggests that businesses continue to look for
opportunities that may emerge over the next 12 to 18 months to pursue
attractive strategic acquisitions at reasonable valuations. As the effects of
the economic shakeout settle in, success will hinge on realistic value
expectations for both buyers and sellers."
The survey shows that all the BRIC economies (Brazil, Russia, India and
mainland China) have lowered their expectations on deals but mainland Chinese
companies, which showed a burst of enthusiasm for deal making last year, have
revised their plans the most, with only 41% now looking for targets compared
to 67% in 2008. Amongst BRIC based PHBs still considering deals, however, the
proportion looking at cross-border expansion has actually risen from 17% to
In mainland Europe, PHBs overall showed an increased appetite for deals
in the next three years (37% up from 30% last year), with access to new
geographic markets cited as the most important driver behind their plans.
Karin Curtis, M&A partner at Grant Thornton, France explains, "The current
strength of the euro against the pound and the dollar is encouraging companies
to consider cross-border acquisitions."
Not surprisingly, the survey also revealed that the turmoil in the
financial markets has severely reduced the appetite of PHBs to raise capital
through a public listing. The proportion of respondents considering this
globally fell from 22% to a meagre 10%, with the steepest fall in interest
amongst the BRIC economies.
The Grant Thornton International Business Report is an annual survey of
the views of senior executives in privately held businesses all over the
world. Launched in 1992 in nine European countries the report now surveys over
7,200 PHBs in 36 economies providing territory, regional and global trend data
on the economic and commercial issues affecting a sector often described as
the 'engine' of the world's economy. Data for eight key industry sectors will
be available for the first time in 2009. The research is conducted by Experian
Business Strategies Ltd. Grant Thornton International donates US$5 to UNICEF
for every completed IBR questionnaire, a donation of over US$39,000 in 2008.
To read the full report, please visit www.GrantThornton.ca/insights.
About Grant Thornton LLP
Grant Thornton LLP is a leading Canadian accounting and advisory firm
providing audit, tax and advisory services to private and public
organizations. Together with the Quebec firm Raymond Chabot Grant Thornton
LLP, Grant Thornton has more than 3,100 people in offices across Canada. Grant
Thornton LLP is a Canadian member of Grant Thornton International Ltd, whose
member and correspondent firms operate in over 100 countries worldwide.
About Grant Thornton International Ltd
Grant Thornton LLP is a Canadian member firm of Grant Thornton
International Ltd (Grant Thornton International). Grant Thornton International
and the member firms are not a worldwide partnership. Services are delivered
by the member firms independently.
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