Third Quarter 2020 Mergers & Acquisitions Update

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US mergers and acquisitions (M&A) activity bounced back in the third quarter after a steep decline in the second quarter. During the quarter, an estimated 2,450 deals were completed, accounting for an estimated $344 billion. While still below pre-pandemic levels, these represented increases of 25% and 12%, respectively from the second quarter. However, on a regional basis, activity in the Midwest region reached the lowest quarterly levels in at least seven years.

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Deal activity increased as economic conditions improved. GDP improved at a record quarterly pace in the third quarter, as the economy was bolstered by record federal stimulus, easing of public venue restrictions from COVID-related shutdowns, and consumers who have grown tired of social distancing. The outlook for deal activity in Q4 and into 2021 will likely also mirror the rate at which economic conditions, which will potentially be impacted by whether additional stimulus rounds are passed and how governments react to increasing COVID-19 cases.

Despite mixed readings on current and near-term M&A, demand remains for high-quality companies in attractive industries. We continue to have discussions with investors and acquirers who are actively looking to put capital to work. If you are interested in buying or selling a company or learning more about how businesses in your industry are valued, contact us here.