We keep you informed about current developments and trends in the international M&A market, successfully completed transactions, and our practical M&A workshops for business owners.
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Developments in the Dutch M&A market
The Dutch M&A market is running at full speed. After the brief downturn in early 2020, activity has increased sharply in almost all sectors since the summer of 2020. In the first half of 2021, activity continued to grow. The market is characterized by high demand for suitable acquisition candidates, with the supply of target companies increasingly lagging behind the high demand. The result is an increase in purchase prices driven by the combination of scarcity in suitable supply, low cost of capital and a large amount of capital available for acquisitions.
Specific Dutch sectors with high levels of M&A activity include flexible staffing, insurance, childcare and managed services (networks, cloud, software, communication). Many private equity players are active as buyers in these markets building portfolios.
For the second half of 2021, we anticipate that this strong trend in M&A activity will continue unabated and that the shortage of suitable target companies will put further upward pressure on purchase prices.
Post by Bas Brusche, FACTOR & ROS
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Is early-stage venture becoming a growth investor’s game?
Global venture funding hit an all-time high in the first quarter of 2021. That sort of increase in venture funding is typically attributable to growth in late-stage funding. But, along with a surge in late-stage funding, there is also a marked increase in early-stage funding last quarter, with $39 billion invested in nascent startups, up from $25 billion in the fourth quarter and $22 billion in the first quarter of 2020.
The Q1 figure marks an all-time global high for early-stage funding.
Growth equity leads early stage The most active investor leading at the Series A and B stages was, surprisingly enough, a growth-stage investor: Insight Partners, which led six Series A fundings. The firm is not alone: Private equity investors now lead just shy of a quarter of all Series A and B fundings, up from 15 percent a decade earlier, relative to venture and micro venture leads.
Post by Jaime Medina, SISOCO PARTNERS.
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Relatively strong M&A activity in the USA
M&A activity in the USA has been relatively strong through the end of 2020 and 1Q21. In 2020, many deals that were delayed due to the onset of Covid were closed in 3Q and 4Q. Concerns over the new Democratic leadership and potential plans to raise capital gains taxes on the sale of businesses have accelerated demand for transactions.
On the negative side, many companies saw dips in their revenue and profit in 2020 and delayed transactions until they could get back to pre-Covid levels.
Likewise, the market for senior debt has been very tight, so some leveraged buy-outs have been pushed back or else have relied more heavily on equity capital.
Post by Andrew Heitner, ALCON PARTNERS