The increase in appetite to pursue acquisitions is a strong signal that executives have learned from prior soft economic periods. The need to satisfy investors’ demands for above-trend returns, combined with increased disruption, means businesses are continuously looking to acquire assets, capabilities and technology.
As a result, the timeline for identifying and buying assets has become compressed, making active pipeline management a must-have for companies. Right now, 51% of local executives expect pipelines to increase in the next 12 months — a sign of active pipeline management.
While capital remains plentiful, we expect to see boards continue to lock in low interest rates to fund their acquisitive ambitions.
Activist shareholders are reinforcing the transformation drive to reshape portfolios
In the wake of an ever-accelerating pace of disruption, local executives are reviewing their portfolio more frequently than ever to be better positioned to identify capital recycling opportunities. Two-thirds of local executives are now reviewing their portfolios at least quarterly — up from 38% six months ago.