Deal flow is starting to increase, putting a bottom into stock values.
This weekend alone saw three deals announced.
- WellPoint (WLP) taking out AmeriGroup (AGP) for $4.9 billion, a 43% premium. This could be the first of many deals linking insurers to providers.
- Campbell Soup (CPB) buying privately-held Bolthouse Farms for $1.55 billion from Madison Dearborn. It's a long-rumored deal that's primarily defensive for Campbell, which needs to find new markets for fruits-and-vegetables.
- Thomson Reuters (NYSE:TRI) paying $22/share for FX Alliance (NYSE:FX), resulting in a 40% pop in shares. The agreement values the company at just under $625 million and is part of a longer term trend of consolidation in financial information.
None of these deals is entirely unexpected or, in some ways, unusual. But like the recently-announced IPO of Kayak they represent a return to financial normalcy, a look across the chasm of present crises to fairly normal and benign business conditions.
As such, they're bullish for the whole market, and the economy in general.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.