Capital Markets Update – October 2021

Capstone-Partners-Capital-Markets-Update-Q2-2021

M&A Activity Continues at Torrid Pace Through Q2:  How Long Can This Last?

Capstone Partners released its Q2 2021 Capital Markets Update reporting that middle market merger and acquisition (M&A) activity in Q2 increased 2.4% from the prior quarter, marking the highest number of closed deals since Q1 2017.

Many transactions that were placed on hold in 2020 launched in 2021 with prospective sellers recouping pandemic-induced losses and expediting exit timelines to capitalize on the current favorable tax environment. Elevated deal activity has also been driven by the historically low cost of capital, supportive fiscal and monetary policy, pent-up consumer demand, and the reorganization of many industries in the wake of the pandemic.

As the M&A market has surged, intense competition for quality assets has driven favorable pricing with strategics leveraging improved balance sheets and private equity firms demonstrating a willingness to pay higher multiples for attractive businesses that complement their investment thesis.

Capstone expects M&A to continue at a rapid pace through year end while dealmakers continue to grapple with staffing challenges and delays for transaction-related services.

Crystal balls are a tricky thing. Anyone thinking of an exit would be well advised to take advantage of current conditions because they won’t last forever.

Todd McMahonHead of Investment Banking

Download our full report for a market outlook and commentary from Capstone Partners’ Head of Investment Banking, Todd McMahon, as well as:

• An overview of leveraged finance conditions, investigating the current lender environment and debt market trends
• An excerpt written by Capstone’s Financial Advisory Services (FAS) team, explaining how to get the most from a quality of earnings review
• How the Transportation & Logistics industry is being reshaped amid a bull market for freight driven by lingering supply chain dislocations
• Transaction data and analysis from Capstone’s direct engagements, outlining private equity acquirer preferences

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