DealTech: Deal prep shows strong growth in 2Q21 – VDR Insight ​

By Rupert Cocke with analytics by Jonathan Klonowski 

VDR Insight is a new initiative from DealTech (formerly known as M&ATech), a regular feature that covers technology trends aimed at M&A professionals. If you would like to give us any feedback, please contact rupert.cocke@iongroup.com

Datasite’s CEO Rusty Wiley

How have user volumes progressed over the second quarter across your platform?

This second quarter has been one of our busiest ever. So far in 2Q21, new projects are up 76% globally, compared to the same time a year ago, and each month is just bringing more activity. We were up 78% in April, over 80% in May. This volume is, however, causing higher valuations and a more competitive environment for dealmakers globally. As a result, many dealmakers have broadened their options to include corporate venture capital, partnerships, and minority stakes, as well as special purpose acquisition companies (SPACs) and private-investments-in-public-equities (PIPEs). Though some of these deal types have cooled off more recently, we continue to facilitate a steady flow of them, including some of APAC’s largest.

Based on this information, can you make any projections for the third quarter?

We expect this activity to keep going beyond 2Q21, too. With mass vaccinations and restrictions beginning to ease in many places, conditions are expected to continue to improve. In terms of sectors, technology, media, and entertainment continue to lead, as it has for the last 12 months, but deal activity in industrials is rising and has, in fact, outpaced life sciences to become the second most active sector for deals on our platform.

Have you spotted any interesting trends recently?

Technology has been a lifeline for people and businesses throughout the pandemic, and we expect more companies to continue to turn to M&A to ensure their digital transformation. In fact, we are seeing this up close, as TMT deals on our platform are up 81% globally in the first five months of this year. Of course, turning to technology to help streamline work applies to dealmakers too. If dealmakers hope to compete in this soaring market, they need to further digitalize their M&A processes. Dealmakers did well last year, quickly adapting to the world of virtual deal-making.

Further research from Datasite