Hear from our advisors what the Q1 2021 M&A market looked like from a boots-on-the-ground perspective.
Trending: #bloodsweatandtears #sellonahighnote #beaggressive #PPPAs we’re headed into the second quarter of our second year of the COVID-19 pandemic, let’s reflect back on some of the patterns of Q1 in the Mergers and Acquisitions market. Overall, 2021 looks strong going forward. Transactions for our first quarter have declined a bit from Q1 of 2020, which was immediately pre-pandemic, however, the aggregate value of our 2021 transactions were significantly larger causing us to have a record Q1 in terms of sales. As far as we can see, the slight decline is not due to buyer demand or available capital, which is at a record high–but rather, supply has slowed a bit as sellers wait out the market while they try to rebuild valuation. Not surprisingly, at Calder we’ve noticed that buy-side M&A has especially taken off vs this time last year. “The economy and environment is becoming energized at the thought of an end to COVID with the vaccines coming out,” raves Garrett Monroe, Mergers & Acquisitions Advisors (MAA) at Calder Capital. The general consensus is that the market is “frothy,” and flush with capital, but perhaps low on quality sellers. According to Rick Purcey, MAA at Calder, “While obtaining new engagements appears to be slower than usual, buyer interest remains strong if it’s the right type of business.” Calder Capital MAA Pankaj Rajadhyaksha observes, “It can be a challenging time to be a seller unless you have had a great year or you’re willing to make a compromise on price and/or structure.” However, this doesn’t mean the market isn’t favorable for sellers. In fact, especially for those companies that had a strong year and whose owners might be looking to retire in the not too distant future, now might be an excellent time to sell in light of prospective upcoming tax changes, as well as a few other considerations.
Companies Sold Q1 2021: 11 vs 14 in Q1 2020
|Breakdown of Industries for Sold Engagements|
|Locations of Sales|
|Q1 2021 New Clients|
|Calder Capital Sell-Side||10|
|Calder Capital Buy-Side||4|
|Small Business Deal Advisors Sell-Side||16|