Middle-market merger and acquisition activity has fallen 21.6% since the second quarter of 2019, due to the pandemic severely slowing transaction volume. That’s according to a capital markets update released Thursday by middle-market investment bank Capstone Headwaters.
The report noted that many buyers have moved their focus internally to moderate operational and financial disruptions due to COVID-19. Meanwhile, lenders have been concentrating on protecting their current loan portfolios. Private-equity middle-market deal activity in particular fell almost 50% year-over-year as firms focused primarily on pursuing smaller add-on acquisitions.
“Deal makers are against the ropes taking a beating but are showing remarkable adaptability and resiliency,” Capstone founder and CEO John Ferrara said. “Looking ahead, I am certain of two things: Deal making will remain constrained until scientists develop a pharmaceutical solution to COVID, and we will continue to see new forms of adaptability and innovation across the deal market ecosystem as we adapt to a new normal.”
