FINANCIAL INSIGHT: MERGERS & ACQUISITIONS
Singapore still taking the lion’s share of Southeast Asian M&A deals Not even the pandemic could fully defeat the investor demand in the company market, with both established companies and up-and-coming Singapore firms in the sightlines.
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nvestor appetite to acquire Singapore companies may have waned at the beginning of 2020, but it is now making a rapid recovery. According to a report by Golden Gate Ventures, 42.6% of merger and acquisition (M&A) deals in Southeast Asia in 2020 were from Singapore. Deals from Indonesia followed closely at 39.2%. The remaining 18.2% of deals were spread across the rest of the region. “Singapore continues to record the highest number of M&A deals in the region in 2020. It remains as the hotspot for deal activity in the region, with around US$3.66B raised in fundraising by privately-held companies in 2020. A large portion of this went to Grab, which raised US$1.6B,” said Michael Lints, Partner for Golden Gate Ventures, in an e-mail interview with Singapore Business Review. The pandemic hit activities such as M&As, exits, and global fundraising, Lints added, with Southeast Asia mirroring the global declines. But investors were bullish for the vibrant Southeast Asian tech landscape last year. The opportunities from the dependence of Southeast Asians to mobile technology, with eight out of 10 viewing it as ‘very helpful’ during the pandemic, have piqued the interest of
Michael Lints
SentinelOne ofa Singapore accounted for 42% of all M&A deals in Southeast Asia last year
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investors amidst the pandemic. “The high proportion of M&A is attributed to a strong demand for innovation among regional tech giants, which has led to preferences in acquihires of existing tech companies. The global tech talent crunch has been exacerbated over the past decade, all the more so in Southeast Asia as the ecosystem now gains unprecedented momentum,” Lints said. Investors gobbled up companies in the fields of adtech, e-commerce, fintech, media, and social networking, making up more than half of the M&As deals in the Southeast Asia region in 2020. Deals averaged at a price of US$74.7m amongst the estimated 45 mergers and acquisitions recorded in the Southeast Asian region in 2020. Singapore-based Grab and Trax, and Indonesia’s Gojek were among the most active in the 2020 M&A scene, with their involvement in 49% of the year’s acquisitions. Gojek has made a total of thirteen acquisitions as of last year, including Loket, Moka and MV Commerce, making it the top acquirer in Southeast Asia. Its merger with fellow Indonesian startup giant Tokopedia in May, forming the combined entity GoTo Group, is set to become one of the largest privately owned tech
