Craig Clay, president of global capital markets at Donnelley Financial Solutions (DFIN), a Chicago-based financial compliance company, speaks with Acuris Capital Intelligence about virtual data rooms—one of their core products—post-COVID-19 as well as its partnership strategy.
Interview by Rachel Stone
Q. What has changed in the M&A process during the pandemic?
The coronavirus pandemic has disrupted trading relationships worldwide – and as a consequence, enterprise contract review, negotiation and renegotiation of contracts are taking place on a massive scale. Donnelley Financial Solutions (DFIN) was invited to participate in an international conversation to address the challenges and opportunities of enterprise contract management during and beyond the COVID-19 pandemic.
Donnelley Financial Solutions [NYSE:DFIN], a risk and compliance solutions company, could seek partnerships to further build out its technology offering, said Craig Clay, president of global capital markets.
The Chicago-based company could turn to partnerships rather than acquisitions as assets can be “pretty expensive,” Clay said. On its path to becoming a one-stop shop for transactions, it could, for instance, consider partnering with a market leader in US Food and Drug Administration (FDA) approvals, he added.
The adoption of technology for M&A due diligence has already been on the rise since the pre-Covid times. The Covid-19 global pandemic has forced dealmakers globally to accelerate the adoption of technology such as drones, cloud-computing and AI to enable virtual due diligence. A growing number of M&A professionals understand and appreciate the benefits of technology for their transactions, and advanced technologies such as cloud-based solutions is now allowing 24/7 access to crucial deal documents from anywhere in the world.
Despite the pandemic, 2020 was the biggest year for IPOs since 2014, and I am confident that the positive trend will continue in 2021.
In conversation with DealStreetAsia (DSA), Craig Clay, President of Global Capital Markets, DFIN discussed how the US election will impact dealmaking, the rise of SPACs, virtual due diligence and how having a risk and compliance solutions partner can smoothen the path to an IPO and beyond. Here are some excerpts from the interview:
Deal-making has traditionally been and is likely to remain dependent on interpersonal relationships. But technology is playing an increasingly critical role in helping private equity and venture capital firms to not only take quicker, more informed decisions on deals, but also obtain a more thorough understanding of the target company’s business, assets, financial performance and risks in acquisitions. COVID-19 has shown few signs of abating but new waves are still impacting many parts of the Asia-Pacific region.
The numbers alone speak volumes. As of mid-September 2020, 95 SPACs (special purpose acquisition companies) with a valuation of approximately $35 billion had priced year to date, shattering “all previous records,” said Craig Clay, President of Global Capital Markets for Donnelley Financial Solutions. In contrast, he said, for the full year of 2019, 59 SPACs had priced, and even this represented a sizeable increase over 46 in 2018 and 34 in 2017.
The market for SPACs, or special purpose acquisition companies, is “shattering all previous records,” according to Craig Clay, President of Global Capital Markets for Donnelley Financial Solutions. In a September 16th webinar hosted by J. P. Morgan, Clay noted that as of mid-September, 95 SPACs with a valuation of approximately $35 billion (£25 billion) had priced year to date. What’s more, 43 other SPACs are currently on file with the SEC, pending pricing. This stands in dramatic contrast to 2019, when just 59 SPACs were priced during the full 12-month period.
This article was originally posted on ILTA.