Trends Influencing the Market
The outlook for 2024 is cautiously optimistic. The early months are anticipated to follow the trends observed in 2023. However, as interest rates stabilize and there’s a better alignment of valuation expectations between buyers and sellers, the latter part of the year will see an increase in M&A activity. This shift presents a pivotal moment for both buyers and sellers to adapt their strategies and position themselves favourably in the market landscape.
One noticeable change we’ll see in 2024, is the significant increase in AI based acquisitions, as we start to see early consolidation in a sector already developing at a tremendous pace. An additional factor that continues to influence the M&A market, are the “Environmental, Social and Governance” (ESG) elements that corporations are aligning them with, as companies look for sustainable practices to build trust, enhance diversity and reduce their carbon footprint.
Notable Mergers and Acquisitions:
- In February 2024, Marcoms group Stagwell, which owns brands including 72+Sunny and Anomaly, has acquired London-based Sidekick, an agency collective with skills in experiential marketing, digital storytelling and branded content. Stagwell and will combine Sidekick with its San Francisco-based global marketing and comms consultancy Allison. Sidekick Co-founders Duncan McCaslin and Ollie Burgoyne will remain as Managing Directors of their respective teams and both will join Allison’s European management team.
- Rainmakers CSI is a consultancy firm specializing in customer centric growth, designing profitable growth strategies based on insight and analysis. They cater to both B2B and B2C clients across various industries, including financial services, FMCG, healthcare, media, and entertainment. Their client list includes Diageo, Kenvue (J&J), MetLife, and Nomad foods. Rainmakers excel in key areas like Brand Strategy & Development, Category Leadership, and Customer Strategy, boasting a strong track record of delivering comprehensive Market Scoping Analysis on a global scale. While the majority of their operations are based in the US, an acquisition by STRAT7 is poised to bolster Rainmakers’ presence in the North American market. Moreover, this strategic move will facilitate mutual benefits for both firms, allowing them to leverage each other’s consulting, technology, data, and insight solutions to drive further growth and innovation.
- Finally, Allegro Funds, a private equity firm who specialise in investing in mid-market companies with growth potential, has finalised the acquisition of Nutun Australia, a notable outsourcing specialist, in a deal valued at approximately $120 million. Operating out of Melbourne, Nutun Australia has established itself as a prominent provider of specialized business process outsourcing (BPO) services, and include major banks, insurers, utilities, and telecommunications companies, on their client list.
2024 will undoubtedly see a larger number of deals than in the recent past, but we need to tread with caution. As Brain Levy, Partner at PwC US, and Global Deals Industries Leader, stated: “Don’t let this M&A upturn take you by surprise. It’s coming, and when it does, it won’t be like ones we have seen in the past. Deal returns will be under greater pressure, and the companies that ultimately come out on top will be those that can demonstrate strategic value, are well prepared and can move fast.”
If you’d like to discuss getting support on your M&A strategy, are looking at getting the latest insight on the Marketing, Agency or MarTech landscape, please contact TKM’s Managing Partner Anil Noorani