M&A Activity on the Rise in 2021

Pitchbook recently released its Global Mergers & Acquisitions (M&A) report for Q1 2021. Overall, the quarter saw 8,753 deals close with values totaling over $917 billion.

Deal activity has increased this year as companies begin to gain confidence in their outlook for the economy, both domestically and internationally. The low interest rate environment has also made it extremely affordable for businesses to finance acquisitions.

The median Enterprise Value to Earnings Before Interest, Taxes, Depreciation and Amortization (EV/EBITDA) multiple for Q1 2021 was 9.3x, the lowest since 2013 when it stood at 9.0x. Between 2018 and 2020, the median multiple was relatively consistent, ranging from 10.3x and 10.5x. The current multiple has the potential to jump back to those levels of the prior three years during the remaining three quarters of 2021 as economies open across the globe.

In North America, 4,078 deals closed with values totaling $493.4 billion. Activity in the U.S. is predicted to increase throughout the year as the country’s expected stimulus package flows through the economy. It will be important to watch for future legislation and action from the current administration. Special Purpose Acquisition Company (SPAC) mergers are expected to be a significant part of M&A activity during the year.

If your plans for 2021 include the possibility of a deal, learn more about Schneider Downs’ experience in advising clients throughout the course of a merger or acquisition by contacting Joel Rosenthal at 412.697.5387 or [email protected].