Intralinks Deal Flow Indicator Predicts Significant Increase In 2014 M&A Volume

When it comes to finance, investing, and M&A, everybody wants a crystal ball. SaaS provider, Intralinks Holdings, Inc. IL thinks it has one.

Statistically Significant

It’s called the Intralinks Deal Flow Indicator (DFI). Importantly, Analysis & Inference Inc., an independent statistical analysis and consulting firm, determined Intralinks DFI was a “statistically significant six month predictive indicator.”

Return of a Healthy Market

Matt Porzio, Vice President of Strategy and Product Marketing at Intralinks told Benzinga that the most recent DFI data indicates that for the first time since 2010, global announced M&A volumes for 2014 as a whole would show an annual increase of between six and 10 percent, compared to 2013.

What that means, Porzio said is, “We are in a sustained growth mode in the M&A market. That is back to being a healthy market.”

Historical Versus Current Information

Porzio was understandably excited about both the significance of these findings as well as the usefulness of the Intralinks Deal Flow Indicator. According to Porzio, traditionally people have relied on historical data to predict future activity.

The problem with that, he noted, is that data are available so long after those companies decided to go to market and sell. “Our (DFI) information,” Porzio said, “is really the only source of broad, statistical information you can get on what’s going on in the deal market right now.”

Related: Online M&A Dealmaking Grows, Fueled By Intralinks DealNexus

High Profile Deals Coming

The latest DFI data, compiled through the end of June 2014, showed a 16 percent quarter-on-quarter (QoQ) and 12 percent year-on-year (YoY) increase in early-stage global M&A activity. These results pointed to sustained momentum in M&A activity throughout the rest of 2014.

Porzio added that compared to last year the global M&A market has continued to exhibit higher levels of activity. “The combination of a good lending environment,” he said, “and high quality assets and companies for sale are driving this growth.”

DFI data suggested that sectors such as manufacturing, telecommunications, media, and entertainment would see a good number of high profile deal announcements, according to Porzio.

Global Sentiment Survey

As a companion piece to the most recent DFI report, Intralinks conducted a Global Sentiment Survey in June designed to gauge dealmaker’s views on the M&A market.

Results of the survey backed up Intralinks DFI data with 67 percent of M&A pros optimistic about the current deal environment and 77 percent predicting M&A activity would increase over the next six months, mirroring the most recent DFI findings.

The Global Sentiments Survey did indicate that dealmakers have concerns about deal valuation, which they agreed, was an impediment to getting deals completed.

At the time of this writing, Jim Probasco  had no position in any mentioned securities.