Deal making during 2020 was generally a year of two halves.
Following a strong level of M&A activity up to lockdown there was 6- 8 weeks of paralysis in April and May – largely as a result of COVID-19 concerns (as everyone acclimatised to the pandemic and its effect on funding and asset prices), but also fuelled by Brexit uncertainty, and potential further changes to Entrepreneurs’ Relief (aka BADR) and tax generally. Despite all of this, M&A activity began to recover (variably dependant on sector) in late May, a trend which has continued and since strengthened, gaining notable traction in September/ October – driven by sellers spooked by the unpredictability of the pandemic and fears of adverse capital tax changes, and steady demand from buyers, especially those with funding.
Whilst we have seen fewer large transactions complete this year, there has been a surge in small medium sized deals – those that benefit owner managers – and the small-mid market has recovered much quicker.
As ever, there have been good and bad sectors – but again many sectors detrimentally affected by COVID have restarted with spirit, fuelled by prospects of early budget which has led to increase in deal activity.
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