Six predictors of a potential M&A target

SINGAPORE (Sept 23): Predicting an M&A often rely on inside knowledge or leaks from within, however, factors such as leverage, size of company as well as profitability has been identified as significant in predicting an M&A, according to an Intralinks study.

The enterprise content management provider analysed a global dataset of public and private companies with the minimum annual revenue of US$50 million ($67.9 million) in the period of 1992 to 2014.

“We found that high leverage and large size are the two most statistically significant predictors of a private company becoming an acquisition target, whereas small size and low profitability are the two most statistically significant predictors of a public company becoming an acquisition target,” says Philip Whitchelo, vice president of strategy and product marketing at Intralinks.

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