2 Investment Banks To Buy As M&A Activity Heats Up

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Given the fast-paced nationwide vaccination drive, most companies feel the worst for the country regarding the COVID-19 pandemic is now behind have started looking forward. Also, uncertainties related to recent national elections are behind the country too. In the current macroeconomic environment, interest rates are low, equity markets are high, and investors are demanding rewarding growth. Consequently, potential acquirers with strong balance sheets and liquidity are earnestly prowling for the logical strategic targets for long-term value creation.

In fact, M&As have been quite prominent particularly in the technology sector since the middle of last year. The sector saw a 33.6% increase in deal volume and a 118.1% increase in deal value in the second half of 2020 versus the second half of 2019. Moreover, 2020 was a year of the special purpose acquisition company (SPAC), and that trend is expected to continue this year also, with the favorable backdrop encouraging them to seek potential acquisition targets.

Against this backdrop, we think investment banks Evercore Inc. (EVR - Get Rating) and Lazard Ltd (LAZ - Get Rating) are well-positioned to benefit significantly.

Evercore Inc. (EVR - Get Rating)

EVR is a premier global independent investment banking advisory firm. The company provides advisory services on matters of strategic significance, including mergers and acquisitions (M&A), strategic shareholder advisory, restructurings, and capital structure formulation. It also assists clients in raising capital and delivers equity research, sales, and trading execution, in addition to providing wealth and investment management services to high-net-worth individuals and institutional investors.

The company acts as an advisory for various M&A transactions. A couple of its prominent mandates include advising General Electric on its combination of GE Capital Aviation Services with AerCap, and advising Jazz Pharmaceuticals plc on its acquisition of GW Pharmaceuticals plc at approximate valuations of $30 billion and $7.20 billion, respectively.

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