Approaching a year into the COVID era, as so many norms have been disrupted, M&A has plummeted—by as much as 85 percent according to some accounts. July ‘20 saw some meaningful changes, thanks to government intervention and a deeper understanding of how hygiene and distancing strategies could mitigate the risks of in-person contact. We’re finally getting to observe the new trends shaping the world of post-COVID M&A. These trends may continue to color things even long after the pandemic dissolves.
- New deals hit annual lows in May, but then began to accelerate in June, July, and August. This may continue, or we may see another slow-down if there is another surge.
- LOIs began to show new signs of life after hitting new lows in June. Alongside this increase in new deals at the top of the funnel, we also began seeing a consistent increase in those executed at the bottom of the deal funnel toward the end of the summer.
- Investors remain relatively uninterested in new days. The monthly number of signed NDAs is a good measure of investor interest in new deals. It began to resurge in June and July, following a huge decline in the first months of the pandemic. Executed NDAs began again trending downward in August. This suggests investors remain reluctant to engage in new deal-making.
There is no crystal ball for the future, and no past precedent we can rely on when making predictions about what comes next. This is why a wise M&A advisor is such an important asset on your deal-making team. A few changes in your strategy could make your business more marketable, and even mean the difference between whether or not it sells at all. Unprecedented times demand quality support.
About Vision Point Capital
For over 20 years, our team has supported our clients with comprehensive advisory services to help them with their complex business valuation and transition needs. Few other firms offer such a complete suite of business transition services as it relates to M&A, Valuation, and ESOPs.
Our client’s personal goals are at the heart of everything we do. We are well versed in advising clients across a broad range of industries and help them manage and navigate valuation and all the business transition alternatives available to them. In fact, when you work with Vision Point Capital, you leverage our resources, experience, and expertise to help you grow faster and optimize value for reaching a successful business transition.