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M&A 2021: Hope on the horizon

The pandemic brought dealmaking to a halt for much of 2020. But there are signs of a recovery and a new report by Ansarada and Acuris reveals optimism is growing for 2021.

M&A has seen its fair share of rallies and lulls. The year 2020, however, has been something different altogether. Deal activity shut down and sprung back in direct correlation with government responses to containing the coronavirus pandemic. Although the second wave of the pandemic is in full motion in many key territories as we approach 2021, challenges can be overcome with an intelligent dealmaking approach. One of the most dominant themes of recent months has been the advantage that technological savviness has afforded companies facing distancing measures.  

To more fully understand investor sentiment towards not only current market conditions but the digital tools that can empower better deal decisions, Ansarada have partnered with Mergermarket in a survey of 50 PE firms, M&A law advisors and investment banking firms. The report, which seeks to demonstrate what market participants and service providers are expecting from 2021, follows what has been both an exceptional and exceptionally volatile year, and how they can use technology to overcome unprecedented obstacles.  

Key findings 

  • Deals down in 2020 M&A activity fell significantly in 2020. The total number of M&A transactions in the first three quarters fell 24% compared the same period in 2019 to 11,643 deals. Total value over this period dropped at a similar rate, by 26% to US$1.9 trillion. Both were the lowest figures for the Q1-Q3 period since 2013.  

  • Customers and consolidation drive deals Following a challenging year, the majority of respondents (52%) believe that the number of M&A deals will rise in 2021. Moreover, respondents expect the top two drivers for M&A in 2021 will be industry consolidation (90%) and customer growth (86%). 

  • Distressed deals on the rise The continued economic fallout of the COVID-19 pandemic is raising expectations of distressed M&A deal flow: 84% of respondents expect the number of distressed deals to rise in 2021, including 28% who believe it will increase significantly (by more than 10%). 

  • Tech eases the deal process in troubled times The COVID pandemic is affecting the way M&A transactions are conducted. Nearly all respondents (94%) expect deals to take longer to complete. Technology is key to helping mitigate these issues: 46% of respondents believe the advancement of deal prep and due diligence technology will be the number one biggest contributor to more efficient remote deal making in 2021, while 34%  believe that the use of technology platforms to manage information governance is the best way for companies to prepare for M&A in 2021.  

The Global M&A Conversation 2021

We've taken these findings and created an event around the deal drivers for M&A in 2021. 

Register your interest in attending the virtual Global M&A Conversation. 

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