Report: M&A Activity Not Slowing Down Anytime Soon


Here at Spend Matters, we predicted merger and acquisition activity in the procurement sector would pick up in 2015 considerably. We weren’t wrong — take the deals between Tradeshift and Merchantry, Infor and GT Nexus, Coupa and Invoicesmash, Determine (formerly Selectica) and b-pack as just a few examples. Looking ahead to 2016, it doesn’t seem as if M&A activity in the U.S. will slow down.

A checklist for direct procurement execution and partner enablement: Direct Procurement Execution: What’s Changing?


The new Global Capital Confidence Barometer from Ernst & Young has reached an all-time high: 74% of respondents report M&A plans in the next year. In fact, these companies are planning numerous deals — 57% reported three or more deals in the works. Additionally, 93% of companies planning to make an acquisition over the next 12 months said they plan to make that deal outside their own sector.

Also, respondents indicated the time for M&A deals is now, as the valuation gap between buyers and sellers is small, E&Y reported. Companies are so confident in the market and optimistic they will land the best deal out there that most respondents said they had canceled or walked away from a deal in the last year. A total of 96% of executives said they are willing to walk away from deals.

Specifically in the procurement sector, solution providers are increasingly looking for ways to offer integrated procure-to-pay (P2P) suites. As such, we expect to see this M&A boom in the procurement sector continue in the year ahead as companies partner up to expand existing suites.

In a recent Spend Matters PRO research brief, we outlined what P2P suite procurement solution vendors need to offer to remain competitive in the market. This list includes:

  • New approaches and tools to help manage the “long tail” of spend
  • Controlled and guided buying approaches that help make the value proposition of e-procurement and P2P real
  • Improved supplier and business network capabilities
  • Platform and ecosystem models  
  • Advanced supplier information management capabilities to bridge onboarding, regulatory compliance and other initiatives
  • E-invoicing and A/P automation capability that goes beyond process efficiencies — enable trade financing, payments and more initiatives
  • Cross-suite business intelligence capabilities (analytics)

Spend Matters’ final thought: the “march to the suite” will continue in 2016. Expect procurement providers to continue to partner to improve suite offerings through inorganic and organic expansion.

Ultimately, practitioners stand to benefit the most from this activity as suites become deeper and broader. But remember: M&A tech synergies tend to run better on the PowerPoint platform in the first year than anything else.

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