What Is the Intralinks Deal Flow Predictor (DFP)?

The Intralinks Deal Flow Predictor (DFP) is a leading indicator of merger and acquisition (M&A) announcements. It is published quarterly by Intralinks, a provider of cloud-based, secure virtual data rooms that investment bankers use to conduct due diligence on potential deals.

Understanding the Intralinks Deal Flow Predictor (DFP)

Intralinks tracks the number of early-stage M&A deals that are in preparation or at the due diligence stage. Using this proprietary data, the Intralinks Deal Flow Predictor (DFP) forecasts deal volume six months into the future, globally and regionally, in North America, Asia Pacific and Japan, Europe, the Middle East, Africa, and Latin America. The Intralinks DFP has been independently verified as an accurate predictor of the number of future M&A deal announcements.

Methodology of the Intralinks Deal Flow Predictor

Intralinks compares the data underlying the DFP with subsequent announced deal volume data reported by Thomson Reuters to build an econometric model (using standard statistical techniques appropriate for estimating a linear regression model) to predict the future reported volume of M&A transaction announcements two quarters in advance, as recorded by Thomson Reuters. Decision Economics Inc., an independent global economic and financial markets information and advisory firm, assessed, replicated and evaluated the model. Decision Economics’ analysis showed the Intralinks DFP has a very high level of statistical significance, with a more than 99.9% probability that it is a statistically significant six-month predictive indicator of deal announcements.

According to Intralinks, "The statistics contained in the Intralinks Deal Flow Predictor represent the volume of virtual data rooms (VDRs) created, or proposed to be created, through Intralinks or other providers. The VDRs are used to conduct due diligence on proposed transactions, including asset sales, divestitures, private placements, financings, capital raises, joint ventures and partnerships. These statistics are not adjusted for changes in Intralinks’ share of the VDR market or changes in market demand for VDR services."

How the Data Is Useful to Investors

Knowing where mergers and acquisitions might occur geographically and in what sectors can help investors make more informed decisions about where they might want to buy or sell securities. They can also compare their own thoughts about the effect of mergers and acquisitions on their investment strategy with others' opinions across the globe.