|
|
Despite turmoil in European markets and growing concerns about a Chinese real estate bubble, the U.S. economic recovery continues to gather steam. Although payrolls in May rose by a disappointing 41,000 new jobs, the Labor Department this week reported that job openings hit a 16-month high in April. Leading economists believe job growth will continue through 2010, although small business hiring will continue to lag the overall recovery. According to the National Federation of Independent Business, their “optimism index” jumped to 92.2 in May, up from 90.6 in April, but only one percent of respondents plan to hire over the next three months. This echoes Fed Chairman Bernanke’s recent comment that given the depth of the recession, the unemployment rate is likely to stay “high for a while.” As for interest rates, Bernanke indicated that an interest rate hike would precede the economy’s return to “full employment” but offered no further details.
U.S. long-term interest rates continue to decline as investors shift money out of Euro bonds into dollar-denominated assets. The Euro has sunk below $1.20 as pessimism about the currency spreads. In a stark reversal of policy, Iran switched €45 billion of its foreign-currency reserves into dollars and gold last week. Currency traders expect similar swaps in the weeks ahead as budget problems continue to plague Spain, Portugal, Italy, Greece and Hungary.
The European woes are bleeding over into China, where the government warned that “the 11.9 percent growth rate in the first quarter won’t be sustained and the outlook for investment and export growth is uncertain.” The Chinese manufacturing index fell 3.2% in May, and the Chinese government continues to rein in a frothy property market, raising equity requirements and mortgage rates in an attempt to prevent a housing meltdown.
|
|
From the Mirus Blog www.FindCapital.org: There were 90 venture capital fundings in New England in Q1 2010, according to the PwC/NVCA MoneyTree™ Report based on data from Thomson Reuters. That represents a 23% increase over the same quarter in 2009. The recently published report details venture capital activity nationally for Q1 2010, as well as 2009 and prior years. (Learn more by visiting our Blog: http://findcapital.org/2010/05/26/vc-activity-up-23pct/)
|
|
“Go away in May” has often been good advice to investors, and so it was in 2010. After peaking with a 19-month high on April 23, the S&P 500 has embarked on a six-week slide that has now set us back to November 2009 levels. Most market watchers believe this is consistent with a temporary pullback in a bull market. The S&P 500 has fallen by 13 percent since April 23rd, largely on concerns that widening budget deficits in Europe could derail global growth.
Source: CapitalIQ (closing values on June 4, 2010)
|
|
Overall middle-market M&A activity fell in May, with the largest drop-off in industrial manufacturing and distribution companies. The services sector saw 122 middle-market transactions in May, a slight uptick from April. Acquisitive buyers in the services sector included Brown & Brown (NYSE: BRO), an insurance brokerage firm, which last month acquired D.C.S.R., Inc., The Gardner-Kirby Corporation, H.E.B., Inc., and the Hedden Agency – in addition to eight more transactions in the preceding twelve months. Technology deals in May included Google’s acquisitions of Ruba, Inc. and SimplifyMedia, as well as their announcement of a pending deal to acquire Global IP Solutions. Not to be outdone, IBM closed on the acquisitions of Cast Iron Systems and Exeros in early May before announcing their intention to acquire Sterling Commerce on May 24th.
Source: CapitalIQ (Middle-Market M&A transactions with a transaction value
of $10 to $250 million for the twelve months ended May 31, 2010)
|
|
Founded in 1987, Mirus Capital Advisors is a middle-market investment bank that specializes in merger advisory, capital-raising services, fairness opinions and valuations to entrepreneurs, corporations and professional investors. By combining a proven process, industry and transactional expertise, and personalized service, Mirus has completed hundreds of transactions for both public and private companies.
Our affiliate Mirus Securities, Inc. is a registered broker-dealer and FINRA/SIPC member.
Take a moment and check out our new Blog, www.FindCapital.org, a resource for business owners and executives who are looking for capital to fund the growth and expansion of their business, or to provide liquidity upon retirement.
For any questions about the Middle Market Monitor or Mirus Capital Advisors, please contact Mirus Capital Advisors at 781-418-5900 or visit www.merger.com. You can also contact our senior bankers directly at:
Sources: CapitalIQ, Bloomberg and Mirus analysis. Copyright 2010, Mirus Capital Advisors, Inc. All rights reserved. Mirus Capital Advisors does not assume any liability for errors or omissions.
|
|
| |