2015 a ‘Banner Year’ for M&A Activity


2015 has been the biggest year on record for mergers and acquisitions. A new report shows global M&A activity totaled $4.304 trillion as of the beginning of December, and U.S. deals alone topped $2 trillion for the first time ever. This stands in contrast to the IPO market, which continued to face headwinds in 2015.

November proved to be the biggest month of the year for M&A volume, with $606.6 billion of deals. Eleven of those deals during November were $10 billion or more. Among those was Pfizer’s $160 billion proposed merger of Allergan announced late in November. It’s the second largest M&A transaction ever recorded, Dealogic reported. The No. 1 spot is the 1999 $172 billion merger of Vodafone Airtouch and Mannesmann.

We have seen a flurry of M&A activity in the procurement technology space alone this year, many of which were multimillion dollar deals. These included Infor’s $675 million acquisition of GT Nexus and Tradeshift’s $30 million deal to acquire Merchantry. Other major M&A deals in the space this year were Coupa acquiring TripScanner, Accenture acquiring EnergyQuote JHA, and the Selectica acquisition of b-pack in March, a move that later led to the rebranding of the provider into Determine. And that’s just naming a few of the deals that took place within the industry this year.

2016 M&A Activity

Here at Spend Matters, we have called 2015 a “banner year” for procurement and accounts payable (A/P) technology transactions, especially when looking at the suite area. We predicted as much.

Overall, M&A activity across all industries isn’t expected to slow down in 2016. We previously reported on a survey by Ernst & Young that showed 74% of companies were planning on a merger or acquisition in the next year.

Even as we head into the final weeks of December, huge global companies are sparking M&A talks. Take the latest merger murmurings from Dow Chemical and DuPont, for example. 2016 should also shed more light on current proposed M&A deals, such as what will come from the possible Staples and Office Depot merger. Anheuser-Busch InBev continues to discuss its merger with SABMiller, too, even defending the deal to the Senate.

The Spend Matters team expects M&A deal activity to continue to have a material impact on procurement organizations in 2016. First, the continued mega-mergers — or potential for mega-mergers — will call into question existing sourcing strategies in markets where there will be less competition than in the past, and in certain cases, the threat of reduced competition will be enough to invite Department of Justice and Federal Trade Commission scrutiny in the U.S. (Consider what recently happened to Staples and Office Depot.)

Second, procurement will continue to have an impact to prove its worth in new and expanding ways as it takes on a more strategic role in M&A and divestiture activity in the business. Building on a range of core competencies from overall analytics to how procurement provisions its services to the business and different stakeholders will be central for procurement to become a critical cog in the corporate transactions hub.

And third, continued consolidation in the procurement technology and solution provider area will create a larger number of one-stop shops — albeit with varying degrees of “true” suite capability. Procurement teams should pay close attention to how a change of control situation within their vendor base could impact their relationships with strategic providers including the ability to influence product roadmap decisions.

In another post, we’ll tackle a new set of M&A predictions and trends for 2016, sharing the views of different Spend Matters team members. Stay tuned!

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