Dear Clients and Friends:
Investors are constantly trying to predict the future – and that has not been easy over the past nine months. Without predictability, many business executives, home buyers, venture capitalists and others are hesitant to buy, invest, hire or transact. There is too much risk. And when they do transact, it’s often at lower values. But things seem to be improving.
Uncertainty around the future of a COVID-19 vaccine has been huge on everyone’s mind. It not only has impacted healthcare, it also has had a dramatic impact on global economies. That uncertainty diminished this week as Pfizer’s mRNA vaccine saw 90% efficacy in phase three clinical trials.
Uncertainty around the US elections diminished this week too – as an increasing number of US states certified results and court challenges were dismissed. Commenting on the US elections, Ashok Varadhan, global co-head of Goldman Sachs’ Global Markets Division said: “The best way I could characterize the reaction from markets has been relief,” as investors analyze the potential economic and policy implications of a new administration, “people are entering back into the market with a high degree of confidence,” he added.
Meanwhile, the Federal Reserve reduced uncertainty by indicating its intent to hold interest rates low until inflation increases.
We are not yet out of the woods. The vaccine trials are not yet completed. Dates for distribution are unclear. Resurgent COVID-19 in the UK, France, Germany, and 34 of 50 US states has led to new shutdowns. The future of the Affordable Care Act, immigration, government stimulus and more remain uncertain. Global unemployment continues to be unacceptably high as do the fiscal deficits of many countries and states; trade wars continue; many of the issues contributing to social unrest have yet to be addressed. But there does seem to be some cause for optimism on multiple fronts. Many economists are now predicting strong economic growth, once a vaccine becomes broadly available and lockdowns end. Investors have welcomed the increased ability to plan. Stock markets are at new highs (even if Zoom’s stock dropped 17%).
As you will see in the report that follows, m&a values among mid-sized FinTech, Data and Analytics companies have largely recovered. A few of the more interesting recent transactions over the past month include:
- Italy’s Nexi SpA agreed to buy SIA SpA for $5.3bn (Payments Tech)
- London Stock Exchange Group Plc conditionally agreed to sell Borsa Italiana to Euronext NV and two Italian lenders for more than €4.33bn ($5.1bn) (Securities Exchanges)
- NEC Acquired Avaloq for $2.2bn (Bank Tech)
- Billtrust to go public via a reverse merger with a SPAC “South Mountain Merger” with an implied enterprise value of $1.3bn (Payments Tech)
- Dun & Bradstreet agreed to purchase the outstanding shares of Bisnode Business Information Group AB for 7.2bn SEK ($818mn) (Data & Analytics – Financial Services)
- TP ICAP to buy trading venue Liquidnet for up to $700mn (Capital Markets Tech)