Companies face AI, deepfakes and other threats as cyber security continues to evolve

BY Richard Summerfield

As artificial intelligence (AI), deepfakes and other threats continue to evolve it is imperative that companies upgrade their cyber security systems as soon as possible, according to OnePoll and Gemserve’s new report: ‘Through the Cyber Lens: The Evolving Future of Cyber Security’.

The study surveyed 200 chief information security officers (CISOs) across the UK and Europe, assessing the readiness of CISOs to confront the evolving challenges in the cyber security space, particularly those derived from the burgeoning influence of AI, while also exploring their expectations for the future.

According to the report, CISOs are increasingly concerned about the use of deepfake AI technologies in cyber attacks. Eighty-three percent of respondents noted that generative AI will play a more significant role in future cyber attacks, with 38 percent expecting a significant increase and 45 percent anticipating a moderate rise in attacks utilising these technologies over the next five years. However, despite the imminent nature of the threat, only 16 percent of respondents believe their organisation has an excellent understanding of these advanced AI tools, and thus are likely unprepared.

“As the AI revolution transforms the landscape of cybersecurity, CISOs stand at the forefront of this change,” said Mandeep Thandi, director of cyber and privacy at Gemserv. “AI is reshaping the contours of cyber defence by augmenting human capabilities, predicting threats, and fortifying organisations against the volatile cyber threat landscape.”

Many CISOs also noted that they do not have the resources to face up to the many challenges they encounter. Around a third of respondents believe they lack the budget required to do their jobs most effectively, while a similar proportion are finding it difficult to recruit and retain staff with the right skills and experience.

A much higher percentage of respondents (92 percent) believe they have robust and tested incident management policies and procedures in place, but there are significant technology and knowledge gaps that should give cause for concern. Only 31 percent of respondents believe they have both security information and event management (SIEM) tooling and cyber threat intelligence, even though the majority of respondents (78 percent) expect the cyber threat landscape to become more complex and challenging over the next 12 months.

Going forward, CISOs will be hoping they are provided with the resources they need to help them navigate the challenging and uncertain future and reduce the efficacy of cyber attacks.

Report: Through the Cyber Lens: The Evolving Future of Cyber Security

M&A activity dips but recovery optimistic, claims new report

BY Fraser Tennant

Following the recovery in the global M&A market in the second quarter of 2023, deal activity fell in the third quarter, according to a new PitchBook report published this week.

In its ‘Q3 2023 Global M&A Report’, PitchBook reveals that global M&A deal value nearly reached a 10-year low in Q3 2023, falling sequentially by 19.9 percent. The report also notes that deal value is down 22.5 percent year to date despite a negligible decline in deal count.

Moreover, sponsor share of M&A deal flow has contracted to 33.1 percent, 4.8 percentage points below its Q4 2021 peak, en route to a second year of decline after 10 consecutive years of expansion. In addition, dealmakers are biding their time with smaller deals until conditions improve for megadeals.

“Nearly two years after reaching its zenith in Q4 2021, the downturn in global M&A shows no signs of slowing and in fact accelerated in Q3 2023,” said Tim Clarke, lead analyst, private equity at PitchBook. “It was a quarter that began with a budding recovery in equity and debt underwriting and stabilisation following the bank mini-crisis. However, it ended with the threat of a US government shutdown and a less friendly interest rate outlook by central banks, which gave M&A dealmakers pause.”

However, several market conditions are pointing to a forthcoming recovery in the M&A market next year. Trillions of dollars in dry powder for private equity sponsors and cash piles kept on hand by corporations are positioned for new deals. In addition, lower private-market valuations may spur rich public strategic buyers to scoop up private targets.

“The preconditions for a rebound are there, starting with the global total of $1.4 trillion in unspent PE dry powder, just 9.7 percent shy of its all-time high,” continued Mr Clarke. “An even larger cash pile is on the books of corporations. In the US alone, cash holdings surpassed $4.1 trillion in Q2 2023, an all-time record, and the figure grows to $5.8 trillion when including reserves held overseas.

The report observes that while only a portion of this is earmarked for strategic investments and acquisitions, untapped borrowing capacity and stock value easily compensate for the rest.

For these reasons, we believe that the currently weak trend in M&A will give way to an eventual recovery,” concluded Mr Clarke. “Recent events have most likely pushed that recovery from Q4 2023 to Q1 2024, but somewhere around this two-year anniversary we expect the tide to turn.”

Report: Q3 2023 Global M&A Report

Air Methods files for Chapter 11

BY Fraser Tennant

In a move intended to restructure its business operations and reduce its total debt, private equity-owned air medical helicopter company Air Methods and certain of its affiliates has filed for Chapter 11 bankruptcy protection.

The Chapter 11 filing allows the company to implement a restructuring support agreement (RSA) with its first lien lenders (including commitments for $80m of debtor-in-possession (DIP) financing), bondholders and its equity sponsor under which such key stakeholders have agreed to support an expedited balance sheet restructuring.

Additionally, the restructuring contemplated by the RSA – which aims to reduce the company’s total debt by approximately $1.7bn – provides for vendors and suppliers to be paid in full, and for teammates to continue receiving their pay and benefits without interruption.

As it moves through the court-supervised process, Air Methods is operating normally and without service interruptions, continuing to serve partner hospitals, healthcare systems and customers.

“We are pleased to have reached this agreement with our key stakeholders, which will enable us to continue supporting patients with lifesaving care and serving as an integral link between the nation’s top healthcare facilities and people in rural and remote communities,” said JaeLynn Williams, chief executive of Air Methods. “Over the past year, we have made meaningful progress optimising our field operations, going in-network with leading commercial insurers and improving our cost structure.”

“We have also seen record numbers of transports, and we have opened several new bases across the country this year as there is a great demand for air medical services. By strengthening our balance sheet, we are taking an important step forward in delivering on our transformation plan while answering every call with the highest level of service and patient care.”

With more than 40 years of air medical experience, Air Methods is the preferred partner for hospitals and one of the US’ largest community-based providers of air medical services. The company’s fleet of owned, leased and maintained aircraft includes approximately 390 helicopters and fixed-wing aircraft.

Air Methods expects to complete the restructuring process on an expedited basis and emerge from Chapter 11 with an optimal capital structure by the end of the year.  

Ms Williams concluded: “With increased financial flexibility and access to additional capital, we will be better positioned to continue opening new greenfield bases, accelerate our talent acquisition initiatives, execute on our growth initiatives and equip more emergency personnel with the expertise needed to safely deliver the highest quality air medical care for generations to come.”

News: Medical helicopter company Air Methods files for bankruptcy

Chevron announces $53bn all-stock acquisition of Hess Corp

BY Richard Summerfield

Chevron Corp has announced that it will acquire its smaller rival Hess Corp in a $53bn all-stock deal which will boost the company’s presence in oil-rich Guyana.

Under the terms of the deal, Chevron will acquire the company for $171 a share, a premium of about 4.9 percent on the stock’s last closing price. John Hess, chief executive of Hess Corp, is expected to join Chevron’s board of directors once the deal is closed in the first half of 2024.

Guyana has become a major oil producer in recent years after huge discoveries by Exxon Mobil, its partner Hess and China’s CNOOC, which together produce 400,000 barrels per day (bpd) from two offshore vessels and have said they could develop up to 10 offshore projects. Chevron said that the acquisition of Hess will add a major oilfield in Guyana as well as shale properties in the Bakken Formation in North Dakota.

The Chevron-Hess merger comes at an interesting time for deals in the oil & gas space, just weeks after Exxon Mobil announced it would acquire Pioneer Natural Resources for around $60bn.

“This combination positions Chevron to strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets,” said Mike Wirth, chairman and chief executive of Chevron. “Importantly, our two companies have similar values and cultures, with a focus on operating safely and with integrity, attracting and developing the best people, making positive contributions to our communities and delivering higher returns and lower carbon.”

“Building on our track record of successful transactions, the addition of Hess is expected to extend further Chevron’s free cash flow growth,” said Pierre Breber, chief financial officer of Chevron. “With greater confidence in projected long-term cash generation, Chevron intends to return more cash to shareholders with higher dividend per share growth and higher share repurchases.”

“This strategic combination brings together two strong companies to create a premier integrated energy company,” said Mr Hess. “I am proud of our people and what we have achieved as a company, which has one of the industry’s best growth portfolios including Guyana, the world’s largest oil discovery in the last 10 years, and the Bakken shale, where we are a leading oil and gas producer. Chevron has a world-class diversified portfolio of assets and one of the industry’s strongest balance sheets and cash return profiles. I believe our strategic combination creates a company that is stronger in every respect, with the leadership, asset portfolio and financial resources to lead us through the energy transition and deliver significant shareholder value for years to come.”

According to Chevron, the deal will help to increase the amount of cash given back to shareholders. The company anticipates that in January it will be able to recommend boosting its first-quarter dividend by 8 percent to $1.63. The company also expects to increase stock buybacks by $2.5bn to the top end of its guidance range of $20bn per year once the transaction closes.

News: Chevron to buy Hess Corp for $53 bln in all-stock deal

Thermo Fisher announces Olink deal

BY Richard Summerfield

In a deal which will boost its life sciences portfolio, Thermo Fisher Scientific has agreed to acquire Sweden-based proteomics company Olink for approximately $3.1bn.

Under the terms of the deal, Thermo Fisher will acquire Olink for $26 per common share in cash to represent $26 per American depositary share (ADS) in cash. The price represents around a 74 percent premium to Olink’s ADSs on the Nasdaq on 16 October, the trading day before the deal was announced. Thermo Fisher will offer to acquire all outstanding Olink common shares and ADSs. The deal also includes net cash of about $143m.

Thermo Fisher plans to fund the transaction using its cash on hand and debt financing and expects the deal to be closed by mid-2024, subject to customary closing conditions, including regulatory approvals. Both companies’ boards have approved the deal. Additionally, Summa Equity AB, Olink’s largest shareholder, as well as other Olink shareholders and management, who together hold more than 63 percent of the company’s common shares, have also signed agreements supporting the offer.

Upon completion of the deal, Olink will be integrated into Thermo Fisher’s Life Sciences Solutions division. Thermo Fisher has said that Olink’s portfolio is home to 5300 validated protein biomarker targets and has seen its work published in 1400 scientific publications. As part of the deal, Thermo Fisher is also set to acquire the Swedish firm’s facilities in the Americas, Europe and Asia.

“The acquisition of Olink underscores the profound impact that proteomics is having as our customers continue to advance life science research and precision medicine,” said Marc N. Casper, chairman, president and chief executive of Thermo Fisher. “Olink’s proven and transformative innovation is highly complementary to our leading mass spectrometry and life sciences platforms. Our company is uniquely positioned to bring this technology to customers enabling them to meaningfully accelerate discovery and scientific breakthroughs. We look forward to welcoming Olink’s colleagues to Thermo Fisher.”

“Olink is dedicated to improving the understanding of human biology by accelerating the use of next-generation proteomics and providing industry-leading data quality at unprecedented scale,” said Jon Heimer, chief executive of Olink. “Thermo Fisher’s deep life sciences expertise, global reach and proven operational excellence will enable significant opportunities for both customers and colleagues, while also providing immediate value to our shareholders.”

Olink finished the first six months of this year with a net loss that grew 31 percent year over year to $22.23m, up from a net loss of $16.99m in H1 2022. The 2023 loss includes a second quarter net loss of $8.27m, up about 72 percent from a $4.82m net loss in Q2 2022. The company’s total revenue grew 13 percent in the first half of 2023, to $56.89m from $50.19m, with Q2 revenue rising 7 percent year over year, to $29.44m from $27.51m.

News: Thermo Fisher Scientific to buy Olink in $3.1 billion deal