The results are in. The Wilcox Investment Bankers’ Mid-Market M&A Survey (August 2020) documents middle-market merger and acquisition activity through the first half of 2020.
As expected, merger and acquisition volume was down due to COVID-19. But a pleasant surprise is that valuations for mid-market deals remained relatively consistent with levels experienced in 2019, which were strong.
For companies whose operating and financial performance held up well through the economic downturn and were not adversely affected, buyers and sellers continue to transact. For those companies negatively impacted, deals are much tougher to complete due to difficulty in determining future performance with any confidence, thereby creating questions around value and more risk-sharing between buyers and sellers.