ArkMalibu Weekly Update: Assessing the Impact of COVID-19
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. Please visit our website (https://www.arkmalibu.com) for more information.
Until our next update, we send best wishes to you and yours for safety and health.