MERISTEM INSIGHTS

LET'S MAKE A DEAL

Market participants often look at merger and acquisition (M&A) activity as an indicator of where we may be in an economic cycle. M&A tends to rise when the economy is growing, and company management believes there is a fair amount of clarity on business fundamentals. C-suites tend to adopt a more conservative stance during periods of elevated volatility or economic deceleration, and corporate actions slow. The drop in M&A deals evidences this during the Dot.Com bubble, the Great Financial Crisis, and the COVID-19 shutdown.

While deal flow for M&A took a breather during the pandemic, the number of deals has roared back, eclipsing previous record levels (see chart above). Many attribute the increase to planned deals that were placed on hold last year and cheap financing in the current low-rate environment. In addition, liquidity from private equity and strategic corporate buyers is fueling the boom. At some point, the M&A cycle may cool, but in the meantime, managers across traditional and alternative strategies are poised to take advantage of the strong tailwinds.

‌

Disclosure: The information and opinions presented in this communication are subject to change without notice, are provided for background purposes only and do not purport to be full or complete. No representation is made concerning actual future performance of investments, markets or the economy. Information obtained from outside sources is considered reliable but is not verified. Before investing, please carefully consider whether an investment is suitable for you. Past performance is not necessarily a guide to future performance and there can be no assurance that an investment’s objective will be met. Please refer to the offering document for further details of the financial commitments and risks involved in connection with investment.  Performance information presented is not an indication of future results and index data is provided for market reference purposes only. This is not an offer to buy or sell or the solicitation of an offer to buy or sell any security/instrument or to participate in any particular trading strategy.  This presentation is the property of Meristem, LLC and is intended solely for the use of the Meristem client, individual, or entity to whom it is addressed. This presentation may not be reproduced in any manner or re-distributed by any means without the express consent of Meristem. Mis-transmission is not intended to waive confidentiality or privilege.