Intralinks predicts global announced M&A volumes in Q1 2015 will be up 10-14 percent year-over-year
Intralinks® (NYSE: IL) announced today the release of the Intralinks Deal Flow Predictor (DFP), a unique predictor of future mergers and acquisitions (M&A) activity. Intralinks is also detailing results from a separate GlobalSentiment Survey it conducted that gauged opinions among M&A professionals on the future deal environment. Together, these provide unique insights into global M&A deal volumes and market trends through Q1 2015.
The Intralinks DFP forecasts changes in the volume of global M&A deals that are expected to be announced in the next six months. The Q1 2015 DFP report suggests that we will see a five percent quarter-on-quarter (QoQ) decrease and an eight percent year-on-year (YoY) increase in early-stage global M&A activity in Q1 2015, with particularly strong performances in North America and Asia Pacific.
The Q1 2015 DFP points to sustained momentum in M&A activity that will carry into 2015. With this latest DFP report, Intralinks is also continuing to predict that global announced M&A volumes for the full year of 2014 will rise between seven and 11 percent compared to 2013, which would represent the first annual increase in the number of announced M&A deals since 2010.
“The combination of increasing competition among buyers along with corporates actively looking for new opportunities is driving increased activity,” said Matt Porzio, vice president of M&A strategy and product marketing atIntralinks. “Sellers are motivated and buyers have access to financing, enabling them to grow. Deal volume continues to go up and we expect to see a good number of high profile deal announcements through early 2015, especially in sectors like TMT (Technology, Media, and Telecoms), industrials and consumer.”
“This is the best M&A environment in the U.S. since 2006-2007,” said Joshua Rosenbaum, co-author of “Investment Banking: Valuation, Leveraged Buyouts and Mergers & Acquisitions,” and Managing Director at RBC Capital Markets. “The U.S. economy is gathering strength while credit and equity markets remain vibrant. Heading into 2015, the fundamental driver for global M&A – the need for buyers and sellers to deliver shareholder value – promises to remain in place.”
Intralinks DFP Highlights – Outlook for Q1 2015
The Intralinks DFP tracks early-stage M&A deals (sell-side M&A transactions that are in the preparation stage or that have reached the due diligence stage) across the world, on average 6 months prior to their public announcement. Intralinks has been the leading global provider of virtual data rooms for over 17 years, and is involved in the early stages of a significant percentage of the world’s M&A deals. Because of this, the Intralinks DFP has been independently verified as an accurate predictor of future changes in the global number of announced M&A transactions, with quarter-on-quarter (QoQ) percentage changes in the Intralinks DFP being reflected six months later in announced deal volumes, as reported by Thomson Reuters. Highlights from the latest Intralinks DFP include:
North American early-stage M&A activity is up 19 percent over the last four quarters, up 14 percent YoY and down six percent QoQ, underpinned by continuing strength in the economy, low interest rates, and increased pressure on corporate buyers to generate growth.
Europe continues to perform strongly and consistently. Early-stage M&A activity was up 16 percent over the last four quarters, up eight percent YoY and down nine percent QoQ. Germany continues to be a major driver of M&A activity in the region. We are seeing a strong rebound in France, Italy, and Spain as their economic recoveries gather pace.
Latin America is still showing weakness. The DFP shows a 10 percent decline in early-stage M&A activity over the last four quarters, a 22 percent YoY decline and an 11 percent QoQ decline. Brazil, the region’s largest economy, is stagnating as weakening demand and investment have coincided with a decline in the commodity price cycle for key exports such as iron ore, which fuelled Chinese industrialization and previously helped Brazil to achieve historical growth rates of 4-6 percent per annum, forecast to fall to only 1.3 percent for 2014.
Early-stage M&A activity levels in Asia Pacific are showing a consistent increase, up 7 percent over the last four quarters, 7 percent YoY and 18 percent QoQ. The jump in QoQ activity was seen across almost the entire APAC region with the exceptions of Australia and Hong Kong. Leading the pick-up in activity were South Korea, Singapore, India and Japan.
Global Sentiment Survey
In September 2014, Intralinks conducted a survey of 700 global M&A professionals to gauge dealmakers’ sentiments and views on the M&A market. The survey’s results show that dealmakers remain positive, although their optimism is lower than in the previous quarter. They expect energy and power and technology to be the two most active sectors over the next six months and still see deal valuation as the most difficult part of M&A transactions.
Highlights of the survey results include:
- 60 percentof M&A professionals are optimistic about the deal environment in the next six months, compared to 66 percent for the previous quarter
- 69 percentexpect deals volumes to increase over the next six months, compared to 77 percent the previous quarter
- 54 percentsay that recent technology deals and technology valuations are signs of a tech bubble
- 62 percentbelieve that tax inversions (where companies buy foreign firms to lower overall corporate tax rates) are partially driving M&A activity
- 60 percent believe that international government action to retain tax revenues will make cross-border M&A transactions harder to close
About Intralinks Dealspace™
Intralinks is a leading supplier of solutions for managing strategic transactions. Intralinks Dealspace, the market leading virtual data room (VDR), gives M&A professionals a complete solution to manage the full lifecycle of a deal.Intralinks Dealspace supports every step of the deal process, enabling deal teams to securely exchange data with buyers, sellers and advisors, helping speed strategic transactions such as mergers, acquisitions, divestitures, capital raises and corporate restructurings.
About the Intralinks Deal Flow Predictor
The Intralinks Deal Flow Predictor provides Intralinks’ perspective on the level of M&A due diligence activity taking place during any given period of time. The statistics contained in the Intralinks DFP represent the volume of VDRs opened, or proposed to be opened, through Intralinks or other providers for the purpose of conducting due diligence on proposed transactions including asset sales, divestitures, private placements, financings, capital raises, joint ventures and partnerships. These statistics are not adjusted for changes in Intralinks’ share of the VDR market or changes in market demand for VDR services. These statistics may not correlate to the volume of completed transactions that may be reported by market data providers and should not be construed to represent the volume of transactions that will ultimately be consummated during any period of time. Indications of future completed deal activity derived from the DFP are based on assumed rates of deals going from due diligence stage to completion. In addition, the statistics reported by market data providers may be compiled with a different set of transaction types than those set forth above.
For more information about the Intralinks DFP, please visit our website.
Dollar edges lower as investors favor higher-risk currencies
By Stephen Culp
NEW YORK (Reuters) – The dollar lost ground on Friday as market participants favored currencies associated with risk-on sentiment over the safe-haven greenback.
Risk appetite was stoked by better-than-expected economic data and expectations that U.S. President Joe Biden’s proposed $1.9 trillion coronavirus relief package will come to fruition.
“The dollar’s down against other currencies but not by a whole lot,” said Oliver Pursche, president of Bronson Meadows Capital Management in Fairfield, Connecticut. “I expect the dollar to be where it is now at the end of the year, and the main reason for that is while I see some signs of improvement in the economy, monetary policy is going to stay where it is.”
“I don’t think the dollar is underpriced or overpriced,” Pursche added.
For the week, the dollar slid about 0.2% against a basket of world currencies, the euro was essentially flat, and the yen lost more than 0.5%. But the British pound advanced more than 1.1% against the dollar, its best week since mid-December.
Bitcoin continues soar to record highs. The world’s largest cryptocurrency was last up 6.6% at $54,961.67, hitting $1 trillion in market capitalization.
Its smaller rival, ethereum, was last up 0.7% at $1,953.28.
The digital currencies have gained about 89% and 1,420%, respectively, year to date, leading some analysts to warn of a speculative bubble.
“One concern I’ve always had (about cryptocurrencies) is how susceptible they are to manipulation,” Pursche said. “But they’re going to continue to gain legitimacy.”
“While it’s great that Tesla made an investment in bitcoin, I’m more intrigued by Blackrock and other major investment firms taking a hard look at cryptocurrencies as a viable investment.”
The Australian dollar, which is closely linked to commodity prices and the outlook for global growth, was last up 1.21% at $0.7863, touching its highest since March 2018.
The New Zealand dollar also gained, closing in on a more than two-year high, and the Canadian dollar advanced as well.
Sterling, which often benefits from increased risk appetite, rose to an almost three-year high amid Britain’s aggressive vaccination program. It had last gained 0.27% to $1.40.
The euro showed little reaction to a slowdown in factory activity indicated by purchasing manager index data, rising 0.21% to $1.2116.
The yen, gained ground against the dollar and was last at 105.495, creeping above its 200-day moving average for the first time in three days.
(Reporting by Stephen Culp, additonal reporting by Tommy Wilkes; editing by Jonathan Oatis)
Shares rise as cyclical stocks provide support; yields climb
By Saqib Iqbal Ahmed
NEW YORK (Reuters) – A gauge of global equity markets snapped a 3-day losing streak to edge higher on Friday, as the recent selling pressure on high-flying big technology-related stocks eased even as investors showed a preference for economically sensitive cyclical sectors.
Oil prices fell from recent highs as Texas energy companies began preparations to restart oil and gas fields shuttered by freezing weather, while the U.S. Treasury yields extended their recent rise.
The MSCI’s global stock index was up 0.47% at 681.88, after losing ground for three consecutive sessions.
On Wall Street, stocks steadied as cyclical sectors edged higher while tech names made modest advances after concerns about elevated valuations led to some selling in recent sessions.
“What we saw (this week) represents a market that is tired and may not do very much. So we are headed for some sort of a pullback, but I don’t think we’re there just yet,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“Investors are not really pulling out of the market, but they are becoming more cautious. It already has factored in another good positive earnings season.”
The Dow Jones Industrial Average rose 119.97 points, or 0.38%, to 31,613.31, the S&P 500 gained 12.93 points, or 0.33%, to 3,926.9 and the Nasdaq Composite added 92.58 points, or 0.67%, to 13,957.93.
The S&P 500 technology and communication services sectors, housing high-value growth stocks, were among the smallest gainers in early trading, while financials, industrials, energy and materials rose more than 1%.
European shares edged higher on Friday as an upbeat earnings report from Hermes boosted confidence in a broader economic recovery. The pan-European STOXX 600 index was 0.64% higher.
U.S. Treasury yields on the longer end of the curve rose to new one-year highs on Friday as improved risk appetite boosted Wall Street, while the yield on 30-year inflation-protected securities (TIPS) turned positive for the first time since June.
Core bond yields have pushed higher globally, led by the so-called reflation trade, where investors wager on a pick-up in growth and inflation. Growing momentum for coronavirus vaccine programs and hopes of massive fiscal spending under U.S. President Joe Biden have spurred reflation trades.
The benchmark 10-year yield was last up 5.1 basis points at 1.338%, its highest level since Feb. 26, 2020.
Oil prices retreated from recent highs for a second day on Friday as Texas energy companies began preparations to restart oil and gas fields shuttered by freezing weather.
Unusually cold weather in Texas and the Plains states curtailed up to 4 million barrels per day (bpd) of crude oil production and 21 billion cubic feet of natural gas, analysts estimated.
Brent crude futures were down 28 cents, or 0.44%, at $63.65 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 66 cents, or 1.09%, to $59.86.
Copper jumped to its highest in more than nine years on Friday and towards a third straight weekly gain as tight supplies and bullish sentiment towards base metals continued after the Chinese New Year.
Spot gold XAU= was down 0.58% at $1,785.71 an ounce.
The dollar lost ground on Friday, extending Thursday’s decline as improved risk appetite sapped demand for the safe-haven currency and drew buyers to riskier, higher-yielding currencies. The dollar index was off 0.295%.
Bitcoin hit yet another record high on Friday, hitting a market capitalization of $1 trillion, blithely shrugging off analyst warnings that it is an “economic side show” and a poor hedge against a fall in stock prices.
(Reporting by Saqib Iqbal Ahmed; Editing by Nick Zieminski)
Oil falls after surging past $65 on Texas freeze
By Stephanie Kelly
NEW YORK (Reuters) – Oil prices fell on Thursday despite a sharp drop in U.S. crude inventories, as market participants took profits following days of buying spurred by a cold snap in the largest U.S. energy-producing state.
Brent crude fell 41 cents, or 0.6%, to settle at $63.93 a barrel. During the session it rose as high as $65.52, its highest since January 2020.
U.S. West Texas Intermediate (WTI) crude futures fell 62 cents, or 1%, to settle at $60.52 a barrel, after earlier reaching $62.26, the highest since January 2020.
Brent had gained for four straight sessions before Thursday, while WTI had risen for three.
“The market probably got a little bit ahead of itself,” said Phil Flynn, a senior analyst at Price Futures Group in Chicago. “But make no mistake, this selloff in oil doesn’t solve the problems. The problems are going to persist.”
Though some Texas households had power restored on Thursday, the state entered its sixth day of a cold freeze. It has grappled with refining outages and oil and gas shut-ins that rippled beyond its border into Mexico.
The weather has shut in about one-fifth of the nation’s refining capacity and closed oil and natural gas production across the state.
“The temporary outage will help to accelerate U.S. oil inventories down towards the five-year average quicker than expected,” SEB chief commodities analyst Bjarne Schieldrop said.
Prices dropped despite a decrease in U.S. oil inventories. Crude stockpiles fell by 7.3 million barrels in the week to Feb. 12, the Energy Information Administration said on Thursday, compared with analysts’ expectations for an decrease of 2.4 million barrels.
Crude exports rose to 3.9 million barrels per day, the highest since March, EIA said.
“The big nugget was the big jump in exports of crude oil,” said John Kilduff, partner at Again Capital in New York. “We’ll have to see what happens with that next week weather in Texas, but I have been looking for a pickup there for a while.”
Oil’s rally in recent months has also been supported by a tightening of global supplies, due largely to production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allied producers in the OPEC+ grouping, which includes Russia.
OPEC+ sources told Reuters the group’s producers are likely to ease curbs on supply after April given the recovery in prices.
(Additional reporting by Yuka Obayashi in Tokyo; editing by Emelia Sithole-Matarise, Steve Orlofsky, David Gregorio and Jonathan Oatis)
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