Merger Consideration Brief (November 2017)

Over the past several decades we have watched a dramatic increase in the number of mergers and acquisitions that have taken place throughout all industries. We wondered if there was a stock based valuation rationale behind mergers that indicated the probability that a company would be involved in a merger within a reasonable period of time. While we do not have a clear signal that our valuation model is a crystal ball, we have noticed a higher frequency of M&A activity amongst stocks we have categorized as A+ in the Merger, Acquisition, Buyout Factor (MAB) calculation.