IMAP is pleased to announce the release of the IMAP Dealbook 2019-2020, an annual IMAP publication showcasing IMAP’s collective transaction track record across a breadth of sectors and geographies.
IMAP Chairman, Jurgis Oniunas, commented:
As we publish this year’s Dealbook encompassing 2019 and 2020 deals, it has been a tale of two distinctly different halves.
Despite the mounting unease regarding a potential economic slowdown, there was an unusually high level of M&A activity in 2019. Clients were driven to initiate transactions by the low level interest rate environment, in conjunction with industry consolidation and succession planning.
In fact, 2019 marked IMAP’s strongest performance since 2012, with 234 M&A deals closed valued at over $13 billion.
This momentum continued into Q1 2020, with IMAP closing 49 M&A deals worth more than $1.4 billion. Furthermore, our number of cross-border deals also rose significantly to 43%, which given the general market slump in cross-border deal flow, is a clear reflection of IMAP’s broad global presence and buyer appetite for non-domestic deals.
As we moved into Q2 however, the prognosis for the rest of the year became decidedly less positive as the pace and magnitude of the trends that will reshape our post-COVID world are becoming clearer.
Though industries such as Food & Beverage, Healthcare and Technology continue to be the top performers, other sectors such as Aviation, Hospitality, and Leisure have been severely hit, with many businesses unlikely to recover very soon. Stimulus packages and government aid have held the wolf from the door for many businesses, but these are only short-term solutions.
With many investors focusing on liquidity and short-term protection, we indeed saw a significant drop in global M&A activity in Q2 and as we moved into Q3. There is what looks to be a temporary pause in current deal activity, with early stage deals put on hold.
That being said, deals are still being closed and all considered, IMAP had a good first half, closing 73 M&A deals worth more than $2.6 billion, with IMAP partners completing several important transactions in key sectors.Q3 has been expectedly slower and many say the real decline is still to come.
So, what’s the forecast for the rest of 2020 and moving into 2021? It still remains to be seen, whether we are facing the U-shaped recovery everyone was talking about, or perhaps now a K-shaped recovery, whereby some have seen a sharp rebound, whilst others have continued to decline.
Without a doubt, the global economy will be markedly affected for at least the next few years.
However, there are signs of promise and opportunities to close deals even with constraints on due diligence and overall de-risking. Companies previously in defensive mode are now moving towards more offensive M&A strategies.
We are seeing more opportunistic M&A as key players, including PE, VCs and strategic investors vie for market share. Likewise, the pandemic has meant the tech landscape will continue to offer attractive opportunities, especially for those able to disrupt in areas such as fintech and healthtech.
IMAP will continue to leverage its years of experience and trusted global connections to help clients move past the recovery phase and find opportunities to thrive moving forward.
Our global team of nearly 500 committed M&A professionals understand the different liquidity and capital supports and providers in different markets, and with access to debt and equity capital, we can help navigate our clients through this ever changing economic landscape, where M&A is poised to play a pivotal role.
It has also brought to the fore the tenets of trust and greater empathy and closeness with our clients.
We wish you all well as we hunker down for the next few crucial quarters.
Jurgis V Oniunas