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While mergers and acquisitions were once a strategy for companies to extend their global footprint, or grow their workforce, technology has shifted the focus. Firms are now motivated to acquire technology companies and assert their dominance in the digital sphere. Businesses might currently be facing a great deal of economic uncertainty, but there are still plenty of deals on the table, and in the first two months of H2 2020, global M&A megadeals totalled $256 billion. No matter whether the intentions of a business scale-up are to drive innovation, or to ensure competitive advantage, technology will continue to take a leading role in future deals. Here’s why technology is an essential piece of the puzzle and how it has inspired the new wave of M&A deals: Future-proofingSome job markets - like professional services - have faced fewer hurdles since the virus outbreak but they still face the pressure to remain relevant and to future-proof their services. Businesses are acquiring to stay in the game and become recognised as trailblazers, rather than chasing the competition’s tail, and M&A deals are motivated by the need to acquire new services, processes, talent or technology. Technology has the power to future-proof a business because it accelerates digital transformation; as companies try to navigate the uncertainty that is ahead, M&As will shift from being a future-proofing approach to a crisis-proofing strategy, and technology will likely play an increasingly central role. The booming cloud services marketNot long ago, AI was considered a futurist technology and conversations centred around whether robotics were a threat to jobs – even to those in the tech industry. However, research has proven how machine learning has the capacity to create more jobs and enable workforces to become more specialised. Within the same family of ‘disruptive technology’ is cloud computing. The global cloud services market is expected to hit a value of $331.2 billion by 2022, and today there are very few businesses which don’t use cloud computing models such as SaaS. This has created a flurry of activity on the M&A scene as corporations rush to snap up businesses who have the expertise and equipment they need to take their operations entirely remote. What’s more, cloud computing is built on the idea of scalability, making it an essential piece of the M&A puzzle. Research has proven how machine learning has the capacity to create more jobs and enable workforces to become more specialised. " FintechM&A deals rely heavily on face-to-face interaction, so it is no surprise that there was a 44.7% drop in the value of transactions in H1 2020 when compared to the previous year. However, in spite of the restrictions and economic uncertainty, Mastercard announced the acquisition of Finicity for $825 million in June. The fintech company specialises in open banking – a business model that gives third-party companies secure access to customers’ banking details, thereby allowing customers to have greater control over their finances and how they budget. Open banking has helped to bring financial services into the modern age - one reason why many similar M&A deals are appearing in the wake of Covid-19. 2019 was hailed the year of fintech M&As, bringing in four megadeals and a total deal value of $121.18 billion in H1 alone. Yet, 2020 has proved to be a promising year and the surge in the acquisition of fintech firms can also be attributed to the need for companies to provide a wider range of multichannel services. Markets are converging and this mounting interest in technology-enabled banking services has stirred up the M&A market where high profile fintech deals will likely go on to break more records. A career in M&AProfessionals working in M&A are in the business of creating value. While some companies will have been forced into survival mode, for others, the pandemic has exposed an opportunity to join forces with emergent start-ups or disruptive corporations. Professionals working in the M&A market are helping these businesses to source and snap up technology companies that will allow them to stay ahead of the curve. As technology continues to infiltrate every industry and discipline, M&A deals will become more widespread and the strategic skills of employees in this field will become more desirable. If you’re ready to take your skills to the market browse our jobs and have a look at our career advice hub. Providing a service that is tailored to youIf you’re interested in partnering with an agency that approaches the recruitment process differently, then Marks Sattin is the choice for you. We have a rich history of providing an unrivalled, relationship-led service to our clients and candidates. Our consultants are committed to connecting businesses of all sizes – from global organisations, to emerging start-ups - with talented professionals. Contact us if you’re looking for more information on recruitment solutions in M&A, financial services, corporate development or investment & advisory.
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‘The only constant is change’ has never rang more true and there is no facet of business that has not been changed dramatically by this year’s global events. It is not about adjusting to any ‘new normal’, it’s about making sure you can adapt adequately to this new, more rapid pace of change'. During May 2020, we produced a survey for our contacts to understand how their business was reacting to the pandemic and to gauge overall market sentiment. We received over 130 responses to key questions relating to their thoughts, reactions and predictions regarding the unprecedented level of change we are experiencing. Although market conditions are changing daily, the ease of lock down has brought a wave of positivity as we look to rebuild on the disruption of the past few months. With this in mind, the below report outlines some of the findings from our research, and our predictions for the future. Covid-19 survey
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From Brexit to international trade tensions, recent economic turbulence has highlighted one thing more clearly than ever: risk management strategies have to be in place to protect profits for businesses trading internationally. If you are an FD or fund manager; many hours of expertise are poured into choosing the right opportunities and tracking yields, but if there is an international element to the investment, even a small change in the currency exchange rate can have a significant effect on profit or the value of returns. With currency rates fluctuating up to five percent in a month last year, volatility is a real threat to any international business transaction. Five percent profit or gains in an investment are hard earned, and can be quickly lost with an unfortunate turn in the exchange rates. The uncertainty exacerbated by Brexit has caused hesitancy to purchase currency with a “wait and see” approach; dealing all FX on spot with their incumbent banking provider. But large swings in rates means that currency volatility and pricing have become higher on the agenda for many; highlighting the need to get the best from a reputable provider. Working to develop strategies based on the unique needs of a business or the requirements of each fund means budgeted levels can be set and protected. If you are trading internationally, you may want to speak to a qualified risk management consultant to consider the following steps: Understand your exposures Businesses could struggle to manage currency risk without understanding where exposures exist and reviewing what they currently do to protect themselves from volatility. Start by assessing your goals, risk appetite, and tolerance to volatility. Is there a budgeted level which is used for accounting purposes? Consider, for example, credit needs and payment requirements such as cost of transfers, bulk payments or international routing. Create a strategy With an understanding of your objectives, you have the power to start making informed decisions. Identify some goals specific to managing currency risk. These could include defining a target exchange rate for some, or all your exposure. Consider establishing a formal risk management policy to define processes. Select the right risk management tools for your business remembering that one size does not fit all. Tactics and execution Once the most appropriate tools have been selected, applying the right trading tactics can mean the difference between success and failure. For a lot of businesses, the strongest strategies often recognise a framework for executing trades at favourable levels while protecting against material risks. It may also be important to review the market and identify recent trading patterns to understand the risks and opportunities available. Evaluate and adapt your strategy Just because a policy has been in place for a long time does not necessarily mean it is still relevant in the current market conditions. Monitor your strategy and consider adapting it to identify shortfalls and build on success. Use a platform which can provide thorough and detailed reporting to assist your decision making. As a provider of cross-currency, cross border payments around the world, Western Union Business Solutions (WUBS) recognises that for a lot of our clients, foreign exchange volatility should be limited as a risk factor. WUBS can offer products which match your strategic currency objectives depending on the needs of your business. In addition, we offer competitive spot rates, optimal routing and cost effective transfers. Our globally leading online platform not only facilitates online payments and bulk upload but can also give real time access to positions and mark to market valuations. Our 10th edition of our highly regarded Market Insight Report represents the views of over 1,100 professionals, and contains insights from our specialist consultants and key business partners on market and employment trends. If you’re looking to find out more on salary benchmarking and the motivations driving the modern workforce today, download our full report which contains key contributions from Seddons Solicitors, Women in Fund Finance, Intoo UK & Ireland and Breaking the Silence.