M&A Dealmaking for Q1 2021: Optimism Reigns
An uptick in Q4 2020 deals points to a recovery in the wake of the pandemic.
8 December 2020
Globally, early-stage M&A in Q4 2020 is strong. It seems the COVID-19 vaccines the market had been waiting for could become reality in Q1 2020.
That’s brought considerable relief to the business community, boosting optimism for M&A. And that makes for a good mood among dealmakers.
A more positive Q4
To begin, let’s take a look at North America. M&A professionals in the region have been particularly busy since the beginning of Q4, even though valuations have been extremely difficult.
As we enter a new year, the preferred route to increased market share for companies will continue to be through acquisitions, as organic growth is still proving difficult in the COVID-19 era. Deal flow has been copacetic, but not as healthy as pre-pandemic. Globally, many transactions that were on hold at the start of the global pandemic will likely be unfrozen, thanks to an uptick in investors’ interest.
For private owners, a key factor in their decisions to take assets to market will be how the valuation climate evolves.
The political factor
Some of the market uncertainty has been alleviated not only by vaccination hopes but by the clarity of the results of the U.S. presidential election. One object of uncertainty still remains, however: Brexit. Looking into 2021, though, it’s possible that many companies may be looking to “protect” some assets as a natural reflex of these governments’ protectionism policies.
Little flux in sector leaders
The sectors that have shown strength the past few quarters have stayed at the top: Tech, Pharma, Industrials, Manufacturing and Energy, with the latter having picked up in early-stage M&A over the last couple of weeks.
But as we come into Q1 2021, there’s much more to learn — especially in our global and regional forecast for the coming quarter. You can get the full story by downloading the newest edition of the SS&C Intralinks Deal Flow Predictor.
Independently verified as a highly accurate six-month forecast of merger and acquisition (M&A) activity, the SS&C Intralinks Deal Flow Predictor is compiled by tracking early-stage M&A transactions globally that are in preparation or have begun due diligence.
Along with our forecast of M&A activity for the next six months, the latest issue includes:
- Spotlight feature: Global liquidity and financing
- An interview with Meghan McGurk, SVP of Investment Banking at Houlihan Lokey