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Submitted by jd100801 on April 2, 2008
Category: Business
Words: 1671 | Pages: 7
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Since our last update, a number of interesting trends and factors caught our eye:
M&A Transaction Activity:
• The number and value of headline-grabbing, billion-dollar deals peaked at the end of June 2007. For the twelve months ending 6/30/2007, dealmakers racked up 290 deals with an aggregate value of $1.148 Trillion Dollars. Since that time, mega-deal activity has dropped.
• The number of M&A deals leveled off at the very beginning of 2007 showing 0% growth for the 12 months ending 1/30/2007, versus the 12 months ending 1/30/2006.
• Deal volume for the 12 months ending 9/30/2007 versus 9/30/2006 has dropped by 6.1%.
• The news from the middle market suggests that the credit crunch has not had an impact on private-company M&A. However, aggregate deal volume is down 6.1%. Middle-market and private deals represent over 70% of the volume. Something is causing friction within the mid-market and private segment.
• The September Duke University/CFO Business Outlook survey indicates that three-quarters of the CFOs surveyed expect M&A activity to slow. Of particular interest is the suddenness of this change in expectations. In the prior quarter’s survey, the majority of surveyed CFOs expected M&A to “stay strong through the remainder of 2007.”
Capital Markets:
• Equity markets have become much more volatile. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) is a “key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Since its introduction in 1993, VIX has been considered by many to be the world's premier barometer of investor sentiment and market volatility.” When the last M&A Outlook was written, the VIX was at 11.57. At the start of November 2007, the VIX had increased to 23.21.
• Despite the increase in volatility, the NASDAQ Composite Index is up by 15.4% for 2007 and by 28% since the last MoneySoft...
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