Companies Most Likely to Deploy Funds in 2018 for Inorganic Growth

Feb 12, 2018

Dealmakers in the U.S. believe that companies are likely to deploy funds in 2018 for inorganic growth, according to a survey conducted by Merrill Corporation, a leading provider of virtual data rooms and services for regulatory disclosure. This survey was conducted as part of Merrill Insight™, and included over one thousand investment bankers, corporate executives, private equity professionals, law firms and accounting firms.  

Key survey findings among U.S. based webinar participants include: 

• Close to half of respondents surveyed (45 percent) believe that companies will most likely deploy funds toward inorganic growth; 25 percent surveyed believe that these funds will most likely be used to pay shareholder dividends; while 17 percent believe that companies will deploy funds toward R&D investments. 
• Nearly half of the survey respondents (48 percent) believe that high valuations could potentially be a market headwind in 2018; 31 percent indicated that political and regulatory uncertainty could be a concerning market headwind.   
• Nearly half of survey respondents (46 percent) indicated that ensuring successful acquisition integration is one of the greatest internal management challenges that corporate development practices face in 2018; 21 percent indicated that incorporating ongoing technology disruption into strategy will be a significant challenge for corporate development executives in the coming year. 
• From a technology perspective, 35 percent of survey respondents indicated that they expect artificial intelligence to have the greatest impact on their respective industry sectors in the next five years; 27 percent believe that big data will have the most significant impact in the next five years; and 21 percent indicated that cyber-security will have the greatest impact.  

“The survey results reflect a general view among dealmakers and corporate development executives in the U.S. that inorganic growth should be fairly strong in 2018,” said Rusty Wiley, Merrill’s President and CEO. “Various factors are driving this activity, including a lowered corporate tax rate, strong equities market, increases in corporate venture capital spend, an uptick in cross-sector transactions, and, more broadly, increased financial flexibility for organizations.  And while global companies are buoyed by the prospects of a strong, favorable M&A environment, they are also focused on ensuring that the integration of these acquisitions are successful. For corporate development practice areas, as indicated by the survey, they are focused on navigating many internal challenges, including finding and retaining top talent, managing the impact of disruptive technologies, and pressure to do more with less.”