March 31, 2011

While well below peak 2007 levels, there were signs of recovery in the M&A markets in 2010 as evidenced by a 20% increase in transaction value compared to 2009. Notwithstanding the economic recovery and the improvement of the credit markets, 4Q 2010 M&A data was mixed as (i) transaction value increased compared to 4Q 2009 and 3Q 2010, but (ii) transaction volume was virtually flat compared to 3Q 2010. As credit markets recovered and private equity funds continued to deploy a portion of their approximately $490 billion of dry powder, the improvement of private equity M&A activity outpaced that of strategic M&A activity. While early 2011 M&A activity levels appear to be following these general trends, the health of the M&A markets in 2011 will likely follow the historical trend of being closely correlated with GDP growth.