Below are our weekly summary thoughts on the M&A market, the economic outlook, selected opportunities and reasons to be optimistic.
We will update you every Friday as the situation continues to unfold.
M&A Market Outlook
The U.S. & Canadian M&A market continues to grapple with tumultuous market conditions and timing uncertainty. Over the past 7 days, we have seen 153 deals close. We will continue keeping close watch on weekly deal volume as we look for the inflection point that signals a return to normalcy in the capital markets.
- St. Louis Federal Reserve Chair James Bullard predicts the economy will “boom” in 4Q20 and 1Q21 from a surge in production due to pent up demand and a resurgence of projects previously put on hold due to COVID-19
- Suggests 3Q20 should be viewed as transition quarter and 2Q20 as a national pandemic adjustment period and planned partial government shutdown (not a conventionally defined recession)
- Views this economic period as akin to driving your car through a construction zone. You have to slow down but not because there are systemic issues with your vehicle
Select Areas Ripe for Investment
- Virtual and Augmented Reality: rising number of applications across many industries, particular focus on healthcare
- Cybersecurity: rollout of 5G networks and use of connected IoT devices will accelerate dramatically, increasing on a massive scale vulnerability to cyberattacks
- Ghost & Cloud Kitchens: stronger reliance on delivery models, cloud kitchens manage costs by sharing ingredients, equipment, staff
- Education: offering of virtual programs, massive online open courses (MOOC’s), cyber training for employees
Good News We’ve Been Reading:
Advancements in Testing & Preparedness
- Abbott Labs has developed a rapid coronavirus test able to deliver positive results in as little as five minutes
- More than 50 companies are working to provide a vaccine and are competing to be backed by the US Government
Economic and Social Impact
- Time after the Great Depression was more progressive than any other time in history in terms of innovation
- We expect to see a surge in willingness to solve and overcome problems as we come out of the other side of this
“This could be a victory and recovery story of a resilient and determined people, of a healthcare system that responded in record time, and a force for good in socially changing and forming new relationships across the globe that we have never seen before. Adversity wins respect; it is always gained on ground where difficulty and challenge reside.”
– Lieutenant General (Ret.) R.L. “Van” VanAntwerp
Retired 3-star general who led US Army Corps of Engineers (USACE) $12 billion Hurricane Katrina rebuild program.
ArkMalibu is happy to answer any questions you may have and to offer guidance during this challenging time.
Until our next update, we send best wishes to you and yours for safety and health.