The NorthView Compass
December 2021 Edition
2021 is coming to a close in true 2021 fashion, more records. Be on the lookout for 2021 annual “stats” in our next Edition of the Compass as 2021 M&A activity has already surpassed any prior year in both transaction volume and dollar value.
Thank you to our company, investor, and strategic partnerships who not only help contribute to this newsletter, but also continue to support NorthView and our client companies. We are blessed to work with such amazing partners and look forward to getting together more in 2022.
Merry Christmas, Happy Hanukkah, Happy Kwanzaa, and for those who don’t have a traditional holiday to celebrate and simply want to air their grievances or prove feats of strength, Happy Festivus!
With the New Year coming, we hope that it’s filled with a bright promise of tomorrow. Happy New Year!
Trends Look To Continue In 2022
The lasting affects of COVID are still being felt today, but when will they begin to subside? Some say, not any time soon. Prices are continuing to rise, its harder to find workers, input costs are up, and logistics are untrustworthy at best. So when does it normalize?
A Deeper Look At Inflation
Central banks around the world have jacked up rates to catch up with run-away inflation, but most still fell further behind. The US Fed didn’t even try. What does that mean for rates going in to 2022?
All this talk of how inflation is bad may have you wondering, why? Well, slow growing inflation is good and is a sign of a healthy economy…higher prices lead to higher salaries. When pricing outstrips wage growth; however, we have a problem.
Even as prices have risen, the consumer continues to spend. Consumers aren’t trying to find a “deal” and are simply enamored with the purchase. Inflation is outrunning wage increases, so when the beat stops, are you and your business ready to face the music?
Plastics, a building block from which much of our everyday goods are derived, have increased dramatically this year (180% for polypropylene and 125% for polyethylene). What supply/demand strains to this industry can other businesses learn from?
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With abundant capital, continued low interest rates, for now, and a rebound in economic growth, inflation can’t stop this 2021 M&A boom from slowing next year. Some even expect M&A valuations to rise even further next year.
Deal opportunities abound going into 2022 and buyers are focused on extra value creation levers as opposed to just top-line costs and synergies.
CFB Playoff Preview
Since the decimation of the BCS – which worked – the College Football Playoff has turned bowl season into a snooze fest besides a few scattered matchups outside of the three games that will determine a national champion.
Here’s the line, and our predictions, for the CFP matchups to crown a champ.
UGA vs. Michigan (+7.5, O/U 43.5)
So long at Stetson Bennett can manage the game better than he did vs. Alabama and Omicron doesn’t sideline more UGA players, UGA covers the spread and the over. Going to be a high scoring affair and UGA’s defense outplays Michigan’s defense.
Alabama vs. Cincinatti (+13.5, O/U 58)
This Cincy team is better than many give them credit for, and they haven’t been beaten up week in and week out all season playing SEC teams. Alabama also covers the spread and the under.
National Championship (SEC championship rematch)
UGA vs. Alabama
Don’t bet against Saban vs. former assistants. Bama wins in a much closer game, 28-24
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A Deloitte survey of Fortune 500 CFOs found their clear priority entering 2022 is on finding a way to attract and retain their talent. Be it through wages or incentives, like flexible schedules, CFOs are rethinking ways to compete in a strained labor environment.
The combination of higher input/product costs with the increased demand for higher wages results in a double whammy of rising prices to the consumer in order for companies to maintain margins.
About NorthView Advisors
NorthView Advisors is a full-service, lower-middle market focused, investment bank that prides itself in establishing and maintaining meaningful, personal relationships with its clients and investors.
Chief Comliance Officer