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Global M&A Activity Pacing for Another Banner Year, Anchored by North American Dealmaking

Vlad Poptamas

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Photo source: flowcontrolnetwork.com
Reading Time: 3 minutes

Despite Diverging Regional M&A Deal Activity, Global EV/EBITDA Multiples Rose; Private Equity Helped Drive Deal Value While Increasing Proportional Activity in Take-Privates and Carve Out Transactions

PitchBook, the premier data provider for the private and public equity markets, today released its 3Q 2018 Global M&A Report, which found M&A deal activity remained robust through the third quarter of 2018, with 15,349 completed deals worth a combined $2.4 trillion. While both M&A counts (12.0%) and deal value (7.5%) declined from the same period in 2017, North American M&A accounted for the highest proportion of deal value in over a decade at 64.4%. Overseas, European M&A activity receded, most likely due to lingering concerns over Brexit and mounting trade tensions. Other notable trends observed in 3Q 2018 were private equity’s growing share of M&A activity as well as deceleration within the oil and gas sector. The increase in private lending funds and leveraged loan issuance provided easy financing for private equity investors, who are continuing to pursue larger and more frequent LBOs and large multi-sponsor buyouts, or club deals. Additionally, the oil and gas sector experienced a 49% decline in deal value coming off a record-setting 2017 in terms of M&A deal value, despite the oil price recovery.

“Global M&A activity remains healthy as North American dealmaking overcomes the weakness occurring in Europe, where a slowdown is underway,” said Wylie Fernyhough, PE analyst at PitchBook. “Financing remains historically cheap and companies have shown an appetite for expansion via acquisitions as the economic expansion extends another year.”

Global M&A Activity

  • North American M&A activity slowed with a total of 8,683 transactions closed totaling $1.5 trillion, representing year-over-year decreases of 9.0% and 8.2%, respectively. Despite the slowdown, nine of the 10 largest deals announced or in progress target North American companies.
  • European M&A has seen 5,646 transactions close valued at $809.1 billion through 3Q 2018 —down from 7,973 completed deals totaling $1.0 trillion recorded through the same period in 2017—representing year-over-year decreases of 29.2% and 20.0%, respectively.
  • Global median M&A EV/EBITDA multiples grew from 9.1x in 2017 to 9.3x at the end of 3Q. Although European M&A activity decelerated, EV/EBITDA multiples in the region rose to 9.3x, up from 8.7x in 2017. Multiples in that region are expanding for the third consecutive year.

Private Equity M&A Activity

  • Year-to-date, PE firms accounted for 33.3% of global M&A activity, up from 30.3% through the first three quarters of 2017. A favorable lending environment, coupled with strong fundraising for the strategy, has allowed the inventory of PE-backed companies to swell fivefold since 2000.
  • PE buyers (buyout/LBO) made up 29.4% of take-private deals YTD, up from 21.9% recorded in 2016, yet still far below the post-crisis peak of 48.1% in 2011.
  • Similar to take-private deals, the proportion of carve-outs or divestitures activity completed by PE firms has risen in recent years. The increase in shareholder “activists”, coupled with ample PE dry powder is expected to continue fueling carve-out transactions.

Spotlight: Oil & Gas

  • Following a record-setting 2017 in terms of M&A deal value, dealmaking in the oil & gas sector has slackened. Through the first three quarters of the year, oil & gas companies underwent 350 M&A deals valued at a combined $125.6 billion – decreases of 23.6% and 49.1%, respectively, from the same period in 2017.
  • Oil prices – which are a major driver of company value – are at their highest point since 4Q 2014, however, deal count and value are on pace to drop by approximately one-half and one-third, respectively, compared to 2017.
  • PE accounted for a sizable portion of oil & gas M&A over the last few years, with oil & gas gas funds raising $96.8 billion across 92 funds between 2013 and 2015. More recently, oil & gas fundraising has declined – averaging just $12.3 billion annually across a combined 31 funds in 2016 and 2017.

Additional coverage in this report includes:

  • Key takeaways
  • Overview
  • Deals by size & sector
  • Spotlight: Oil & gas
  • Spotlight: Corporate rounds

Download the full report here.

Editor - With a passion photo photography, webdesign and content, it made sense for me to also integrate news editing and press release publishing. I am also passionate about the car industry, so you will surely find some exciting news reporting from my side about the automotive industry.

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Banking/Financial Services

OKEx Launches Thai Baht (THB) and British Pound (GBP) OTC Trading

Vlad Poptamas

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OKEx Launches Thai Baht (THB) and British Pound (GBP) OTC Trading - Source: OKEx
Reading Time: 2 minutes

 

OKEx, the Malta-based world-leading digital asset exchange, announced to launch two new currencies – Thai Baht (THB) and British Pound (GBP) on its over-the-counter (OTC) trading platform (also referred to as fiat-to-cryptocurrency platform). Users in Thailand and the United Kingdom can now complete KYC verification to be eligible to trade on the OTC trading platform.

OKEx OTC trading allows users to place orders with self-selected exchange rate and payment methods to buy or sell Virtual Financial Assets with fiat currencies, which benefits them by offering a low-volatility market and zero transaction fee. Instead of the listing of the new currencies, Thai Baht (THB) and British Pound (GBP), OKEx OTC trading platform has already been facilitating global digital assets trading with the Vietnamese Dong (VND) and Chinese Renminbi (CNY) fiat-to-cryptocurrency markets, and more currencies are expected to come in at a later time this year. The Thai Baht (THB) and British Pound (GBP) OTC trading markets currently support BTC, USDT, ETH, and LTC.

“Our mission is simple at OKEx. We aim to offer flexibility and convenience to our traders. Thailand and the UK own the fastest growing crypto communities in the world. We see great potential in these two markets and want to support the needs there. Because of the increasing trading volume and number of traders in these two countries, we decided to launch the new THB and GBP trading services on our OTC trading platform. Wherever the market potential locates, we will expand to there. In 2019, you can expect more currencies will be supported on OKEx,” said Andy Cheung, OKEx’s Head of Operations.

OKEx OTC Network Launch Events and Promotions

To celebrate the launch, OKEx has come up with new incentives to encourage new sign-up for merchants and customers in Thailand and the UK. From January 23 to 27, newly registered customers can earn up to 50 USDT for making a minimum deposit of 100 USDT (or equivalent) and complete their first OTC transaction on OKEx, while the top 70 merchants with the most transaction volume will be rewarded 30 USDT (1 time per day).

In addition, the OKEx OTC Network Launch events will be hosted in Bangkok, Thailand on February 13, 2019 and London, UK in March respectively.

For more details, please refer to OKEx Twitter.

Risk Warning: Trading digital assets involves significant risk and can result in the loss of invested capital. Users should ensure that they fully understand the risk involved and take into consideration their level of experience, investment objectives and seek independent financial advice if necessary.

 

 

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Banking/Financial Services

Forrester: Customer Experience in the UK Stagnates With More Brands Becoming Mediocre

Vlad Poptamas

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Joana van den Brink-Quintanilha.
Reading Time: 2 minutes

 

Not a single brand in the UK has managed to rise to the top of Forrester’s Customer Experience Index (CX Index™) rankings or continued to move upward. Customer experience (CX) quality languished in 2018 as more brands become mediocre.

Forrester’s CX Index methodology measures how well a brand’s customer experience strengthens the loyalty of its customers. Based on a survey of 9,033 UK adult customers in 2018, Forrester benchmarked CX quality at 36 brands doing business in the UK.

Liverpool Victoria (LV=) confirmed its position as number one in the auto/home insurers category. Nationwide Building Society still topped the banks rankings in 2018 despite seeing its score stagnate, while new entrant Very.co.uk takes over Amazon’s position in the digital retailers category. John Lewis continues to be the number one multichannel retailer and while Tesco came out on top among wireless providers.

The percentage of UK brands making it into the good category fell from 31% in 2017 to just 14% in 2018. A staggering 86% now deliver OK experiences, which suggests customers are struggling to tell the difference between the experiences offered by competing brands.

The auto/home insurance and multichannel retailer industries saw their average score rise by a small but statistically significant amount this year. In contrast, the industry average score for banks fell by almost 4 points, with all but one of the seven banks seeing a statistically significant decline to their score. This year, the banks provided an average of seven emotionally positive experiences for each negative experience, down from 11 in 2017.

In fact, Forrester believes that emotion is key to the positive development of a brand. “Brands that want to break away from the pack should focus on emotion: How an experience makes customers feel has a bigger influence on their loyalty to a brand than effectiveness or ease in almost every industry,” says Joana van den Brink-Quintanilha.

Even a minor improvement to a brand’s customer experience quality can add tens of millions of dollars of revenue by reducing customer churn and increasing share of wallet. What’s more, customers with positive emotions are more willing to pay a premium price for the same products and services.

To learn more about how Forrester’s CX Index can help your business and register for a demo, please visit https://forr.com/2CvyfZh.

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Banking/Financial Services

Licensed Crypto Exchange Covesting Introduces Fiat Gateway

Zoltán Tűndik

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Reading Time: 1 minute

 

Covesting, a licensed European-based digital currency exchange and professional trading platform offering secure and technologically advanced infrastructure for investors and traders worldwide, has introduced the first stage of their fiat gateway and cryptocurrency converter. EUR deposits via wire transfer are now available.

Additional options for fiat deposits/withdrawals as well as the buying and selling of cryptocurrencies will be released in stages over the coming weeks.

Covesting’s Founder and CEO, Dmitrij Pruglo, spoke about the company’s latest update, saying:

“The launch of a fiat gatewayis yet another step towards our ultimate goal of being the most complete, secure and transparent cryptocurrency platform in the industry. Allowing retail and institutional clients to legally exchange fiat into crypto automatically gives Covesting an edge and puts us among very few exchanges who offer such a solution. There are hundreds or maybe even thousands of crypto-crypto exchanges out there, but few who offer a legally compliant bridge between crypto and the traditional world of finance. We will continue to monitor the market and adapt to the new reality while offering the most demanded tools for our users.”

 

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