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Raymond James investment banking vice chairman Fred Lane on the outlook for mergers and acquisitions.
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They not money going into mergers and acquisitions so far this year.
Is -- the highest -- since 2005.
With the announcement of yet another deal with the big one between Office Depot and office Max.
Will the floodgates open some more but that's Raymond James vice chairman investment making -- -- joins me now from Boston red how Mario.
Good afternoon -- her you again in about and they would give a don't ask you about Office Depot and office -- mean in in the world -- that NA did this deal makes sense to you.
Is this a sign of a better things to come -- and an -- for 2013.
When I have a long history with us Staples going back to my days as a founding investor of the company and so -- this is an industry that I.
Keep a close tab on a watch.
And this deal is of tremendous benefit to the industry as a whole because they're too many stores in the industry this too much capacity.
It's great -- to each company both -- -- -- Max.
Since they estimate half a billion or more in savings.
And their profile forma combined market capitalization is estimated to be only.
Two and a half billion.
And that's giving some credit to assuming a trade off -- -- So it's it's a tremendous -- benefit to the to shareholder groups despite the uncertainty surrounding who's going to be the CEO was corporate headquarters going to be.
All of that's a little confounding.
From a Staples viewpoint it's tremendously valuable as well rationalize the industry takes up more stores -- Staples will also benefit.
-- the next twelve months.
Over the integration woes into that integration complexities that have to go with -- deal of this size so it's you know it's great for the industry it's good for all three shareholder groups.
Out amid all of that we'll see it but again the other and that same business and -- -- a lot of other sectors and I think there's a lot of speculation in right now about.
Potential and NAN and -- we you know we talked about the consumer but I wanna get your take us on the other groups as soon to be.
Kind of have the radar right now -- in technology at think that's an obvious -- there's always.
And minute tuning the technology sector but also in the healthcare sector right now.
-- -- -- -- we're gonna see the most activity are you bullish about activity.
-- my AccuWeather forecasts -- it's gonna continue to be across all sectors and you know I we actually did an internal sort of survey.
About that this morning.
And we kind of examine where are we busy and we're busy across all sectors the our energy business is as busy as it's ever been.
This consolidation going on and that's based financial services is a little less busy than it's been still busy -- to a lot of banks out there.
Technology services -- -- said health care.
Continues to be and will continue to be an area of consolidation in part because the health -- space like the technology space like the technology services based.
And to some extent like the consumer and retail space is all about new business creation.
And new business.
You know consolidation and and and frankly chaotic and disruptive destruction.
No one of the things I think this election about -- is that in this environment we've seen is really over the last -- -- in particular is that many companies.
If you have a choice here either be acquired or private equity takes them takes them private they get away from the public markets -- -- sense -- Tennessee.
More private equity deals -- -- -- -- -- companies say that -- tired of dealing with the public markets and analysts and financial reporters to think that's gonna happen.
But Raymond James RR private equity coverage businesses it is seeing a lot of pressures on private equity firms to put out money.
And also to clean up plan and monetize older portfolio companies.
You know these these firms tended to have pretty slow 20082009.
-- 2010 periods.
That was almost three euros lost not literally but there was a lot a lot of lost opportunity.
And for obvious reasons partly because the credit markets were shut down during part of that period.
And so what's the result the result is there under a lot of pressure to put money out and they're under a lot of pressure to monetize investments -- -- remember.
Funds that they had in place in 2009.
And ten and eleven are now three years -- or four years over five years older.
Those funds have to be put to work because they have a limited duration I think the thing.
That they also -- coming to understand and certainly the limited partners do is her lower rates of return of also but declined.
A lot to tell you I was good as and it US Airways and American I mean I think we're gonna be left with one airline after hot.
Yemen exiting airline sector -- never ends Fred lane Raymond James investment banking vice chairman Fred thank you very much.
