Intralinks predicts strong Q3 for M A

The software company that provides data rooms for Goldman Sachs, Freehills and companies to conduct due diligence on M&A says deal volume is rising.

Intralinks, the software company that provides data rooms for merger and acquisition due diligence, says Asia is one of the hottest markets for M&A globally and Australia is one of the most active location for deals in the region.

Activity in Intralinks' M&A data rooms in Australia in the first quarter this year rose 25 per cent compared to the previous quarter and 35 per cent from a year earlier.

M&A deals usually take three to six months of due diligence and negotiations before an agreement is signed. A significant increase in data room activity in the first quarter suggests the third quarter this year will be a busy period as this is when deals will be publicly announced, says Javier Colado, the Intralinks president for Asia Pacific.

In Asia, Intralinks data room activity was up 10 per cent in the first quarter compared to the previous quarter and 18 per cent from a year earlier,  Mr Colado says. There has been a “significant increase” in the number of Australian companies seeking to buy consumer products and technology companies, he says.

“That’s a good sign of the strength of Australian companies,” Mr Colado told Data Room in an interview.

Non-Australian companies in 2014 have been mostly interested in acquiring Australian energy and power assets, according to Intralinks.

In April, Royal Dutch Shell announced it would sell its Australian downstream petroleum assets to commodities trader Vitol Group for $US2.6 billion. In the first quarter, Aurora Oil & Gas and Baytex Energy announced a $US2.18bn merger.

In the year to date there have been $US49.4bn pending or completed M&A transactions, more than double the $US23.2bn in the same period last year, according to Bloomberg data. Goldman Sachs, UBS and Citigroup are the top three M&A advisers among the investment banks so far in 2014, says Bloomberg.

Intralinks provides data rooms in the Australian market in competition with Sydney-based Ansarada. Investment banks that use Intralinks data rooms in Australia include Goldman Sachs and J.P. Morgan as well as law firms Allens and Herbert Smith Freehills.

In the US, Mr Colado estimates Intralinks has about a 40 per cent market share among all M&A data rooms and in Europe about 30 per cent. In the US and European markets Intralinks competitors include Merrill and RR Donnelley.

(Reporting by brett.cole@businessspectator.com.au)  

(Editing by miranda.maxwell@businessspectator.com.au)