Actionable Ideas for Companies and Sponsors
Rapid Growth in Cross-Sector M&A Activity
M&A activity in 2020 will see a continued rise in transactions involving non-traditional, cross-sector combinations. Increasingly, the impetus for M&A is not just the pursuit of scale, growth or traditional synergies, but rather the strategic acquisition of technology platforms to transform their business models. To accomplish this, companies have been completing acquisitions outside their sectors to marry technology with products, and to pursue acquisitions of digital supply chain, robotics and artificial intelligence assets aimed at gaining a competitive edge.
Several recent transactions support this theme: (i) In October, Novartis announced a major partnership with Microsoft to leverage artificial intelligence to transform the discovery, development, and commercialization of medicines; (ii) SAP completed the $8.0 billion acquisition of Qualtrics to add capabilities that enable its enterprise customers to capture data on end-user experience; and (iii) Roche acquired Flatiron Health for $1.9 billion to enhance its digital presence for health analytics with the goal of accelerating data-driven personalized healthcare in oncology.