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Middle Market M&A Update - Q4 2020

February 23, 2021

Middle Market M&A Update - Q4 2020

Synopsis
20 Minute Read

Aggregate deal value for the quarter increased to $4 billion across 66 transactions. By comparison Q3 totalled $3.5 billion in aggregate deal value across 54 disclosed transactions. Increased deal volumes suggests that investor sentiment is increasingly positive, especially as the vaccine roll-out commences and economic normalization is expected.

Insight
Progress Insight Corporate Finance

Aggregate deal value for the quarter increased to $4 billion across 66 transactions. By comparison Q3 totalled $3.5 billion in aggregate deal value across 54 disclosed transactions. Increased deal volumes suggests that investor sentiment is increasingly positive, especially as the vaccine roll-out commences and economic normalization is expected.

Transaction volume during Q4 has remained slightly skewed towards more defensive sectors heavily exposed to COVID-19.

  • Healthcare accounted for 20% of total deal volume, up from 19% in the previous quarter. Two deals were made by
    acquirer WELL Health Technologies Corporation and two deals were made by CloudMD Software & Services Inc, out
    of the 13 total health care deals, as virtual healthcare services have become attractive to industry players.
  • Industrials accounted for 14% of total deal volume. Canadian Pacific Rail Limited acquired Detroit River Tunnel Partnership for +$410 million, which was the largest deal in the quarter.
  • Materials accounted for 17% of deal volume, down from 20% in the quarter prior, driven by a number of mining transactions.
  • The Financials sector, which made up 2% of total deal volume in Q3, accounted for 7% of total deal value in Q4 with 5 deals closed. Uncertainty regarding performance of loan books, life insurance, and capital markets business has slightly subsided since previous quarters.

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