|Mid-sized companies act more and more as consolidators|
The mergers and acquisitions market has never been so hot. In the year's first seven months, 434 transactions targeting Brazilian companies were recorded, a 34% increase compared to the same period last year, according to a survey by PricewaterhouseCoopers (PwC). Amid so many deals, mid-sized businesses stand out. Historically seen as subject to acquisition, they have started to act on the opposite side of the chain, turning themselves into consolidators in their sectors.
"Mid-sized companies now carry out business acquisitions to gain regional space", analyses Alexandre Pierantoni, partner in PwC's mergers and acquisitions area. Their presence is reflected in the value of transactions, which have become more modest. According to the survey, out of 124 operations that had their numbers made public, 94 had an average value of US$ 20 million.
The financial fuel for this movement comes from financing from the Brazilian Development Bank (BNDES), private banks and, increasingly, private equity sector. This year, 41% of the announced mergers and acquisitions deals received resources from venture capital funds.
This cultural shift and the sophistication of the business environment are benefiting mid-sized companies. The time when merging companies was a synonym for lack of success is long gone. The idea that organic growth is the only path has also been forgotten. "Making acquisitions to grow faster was a strategy for only a few players. Today, it's a necessity," assesses the consultant Raul Beer, who works with M&A for small- and mid-sized companies.