🌟 Hello, Reader

As we approach the close of 2025, KSMC sends warm holiday greetings—may your deals close swiftly and your Christmas and Year-end celebrations be merry!

Welcome to Issue 14 of Double Klick, your bi-weekly briefing on M&A, finance, and AI innovation, with one final edition for this year slated to be released on December 31. Stay tuned…

…and, let’s explore what’s new in this edition.

Warm regards,
Kapil Sukhija
Founder, KSMC

📊 Deal Strategy Deep Dive

Deal Jumping & Topping Bids in M&A

What This Means: “Deal jumping” occurs when a new bidder makes a competing offer after a deal is announced or signed, presenting a higher or better-structured proposal. This can force boards, sponsors, and strategic buyers to reassess the deal, their fiduciary duties, and protections in place.

In mid-market deals, these situations are less common than in large-cap transactions, but they do happen — especially when deal protections are lighter, financing is accessible, and a competitor sees strategic opportunity.

Common Challenges: 

• Targets are bound by deal protections like no-shop clauses, matching rights, termination fees, and fiduciary-out exceptions, but boards can still consider superior proposals

• Topping bidders sometimes underestimate the importance of deal certainty, financing, and regulatory approvals compared to just offering a higher price

• Original buyers may rely too heavily on break fees without maintaining strong process discipline or effective shareholder communication

• Boards can face litigation risks if information flows are mishandled

• Public bidding dynamics can trigger “auction” effects, affecting employee confidence, customer perception, and market sentiment

Real Deal Context: Occidental Petroleum vs. Chevron / Anadarko (2019):

• Chevron initially had a signed agreement to acquire Anadarko

• Occidental stepped in with a $57B cash-and-stock offer, improving financing certainty (including Berkshire Hathaway support) and better terms

• Anadarko’s board ultimately switched to Occidental, paying Chevron a $1B break fee

• This is a textbook example of a successful topping bid, illustrating how structure, certainty, and strategic financing can outmaneuver a signed deal

Suggested Success Factors:

• For topping bidders: Present fully financed terms with improvements over the existing agreement (e.g., covenants, closing conditions, reverse break fees). Demonstrate the ability to close faster or with fewer hurdles.

• For incumbent buyers: Negotiate clear no-shop provisions and proportional break fees. Maintain rigorous process discipline and clear communication with shareholders.

• For boards: Document deliberations, seek third-party fairness opinions to withstand legal or shareholder challenges. Carefully manage messaging to employees, investors, and the market to protect deal value.

Share Your Perspectives: Deal jumping and topping bids are high-stakes maneuvers requiring strategy, foresight, and solid legal guidance. Have you been on either side of a topping bid? We would be interested to know how you navigated through the challenges?

🌍 Global Pulse

Will 2026 Deliver the Biggest M&A Deal Ever?

While the number of mergers and acquisitions has slowed in 2025, the size of headline transactions is skyrocketing, and 2026 could be the year mega‑deals break records.

Global M&A activity reached about $4 trillion by November 2025 — more than 40% higher than last year’s pace, despite fewer deals overall. Some blockbuster transactions have already made headlines:

• Paramount Skydance’s bid for Warner Bros. Discovery — one of the most closely watched contested offers of the year

• Union Pacific’s ~$88 billion acquisition of Norfolk Southern, set to reshape the U.S. rail industry

• Electronic Arts’ ~$55 billion take‑private buyout — now the largest buyout on record

What’s fueling the boom?

Dealmakers point to a mix of:

• Abundant capital and favorable borrowing conditions, ready to be deployed

• Rising stock prices, providing strong currency for acquirers

• CEO ambition to scale and stay competitive in fast-changing industries

Regulatory hurdles remain — antitrust scrutiny and trade policies could influence outcomes — but analysts are already predicting record-breaking transactions in 2026. Forecasts suggest global M&A volume could climb toward $7.8 trillion by 2027, and Breakingviews hints at mega-consolidations across tech, telecom, and financial services.

If Reuters’ take is anything to go by, the next year could deliver a deal that rewrites the M&A record books. But, as always in the world of mega-deals, only time will tell if this becomes a reality.

🤖 AI Tools Spotlight

Payhawk: AI-Enabled Spend Management

Payhawk is a spend-management platform for mid-market and enterprise finance teams operating across multiple entities. It combines corporate cards, accounts payable, expense management and real-time spend controls in one system, with AI-powered automation to improve visibility and compliance.

What The Tool Does?

• Centralizes card, invoice and expense data across entities into a single, real-time view

• Uses AI and OCR to automate transaction categorization, reconciliation and policy checks

• Provides dashboards by entity, category and cost center to monitor spend and compliance

• Integrates with major ERP and accounting systems, including NetSuite, Microsoft Dynamics, Xero and QuickBooks

• Enforces spend policies through configurable card rules, limits and approval workflows

Why It Matters?: For mid-market companies or PE-backed groups, fragmented spend data can slow financial oversight after growth or acquisitions. Payhawk helps reduce manual reporting and spreadsheet-based consolidation by giving finance teams faster, standardized visibility into group-wide spend—supporting stronger cost control and scalable financial governance across multiple entities.

Explore the tool here.

💭 Dealmaker’s Quote

“The trick is not to learn to trust your gut feelings, but rather to discipline yourself to ignore them. Stand by your stocks as long as the fundamental story of the company hasn't changed.”

— Peter Lynch

🏢 About Us

KSMC is a Toronto-based boutique advisory firm founded by Big 4 alumni driven by an entrepreneurial and innovative vision. We provide comprehensive M&A Advisory Services, strategic CFO Consulting, and tailored Accounting Solutions. Our expertise and network spans the complete transaction lifecycle—from financial due diligence (QoE reviews) and business valuations to full sell-side mandates—serving middle-market clients across industries in Canada, U.S., UAE, India, Puerto Rico, and Botswana.

Know more and reach out to us here.

Disclaimer: This newsletter is provided for informational purposes only and does not constitute any form of advice. We do not have any sponsorship, affiliate, or commercial arrangements with any companies, tools, or services mentioned in this newsletter. All examples and case studies are based on publicly available information and are included for educational purposes only.