Deal Activity
PitchBook Q1Winkler Wall is a quarterly report that provides an in-depth analysis of the mergers and acquisitions (M&A) market in the United States. The report is published by PitchBook, a leading provider of data and research on private equity, venture capital, and M&A transactions. The Q1Winkler Wall report covers the first quarter of the year and provides insights into the trends, deal activity, and valuations in the M&A market. In this article, we will take a closer look at the key findings of the Q1Winkler Wall report and what they mean for the M&A landscape.
The Q1Winkler Wall report shows that deal activity in the US M&A market remained strong in the first quarter of 2021. There were a total of 2,962 deals announced during the quarter, which is a 20% increase from the same period last year. The report also highlights that the average deal size increased to $433 million, which is a 7% increase from Q1 2020.
One of the notable trends in deal activity was the increase in cross-border deals. The report shows that there were 505 cross-border deals announced in Q1 2021, which is a 33% increase from the same period last year. This trend is likely driven by the global economic recovery from the COVID-19 pandemic and the increasing interest of US companies in expanding their international presence.
Another trend highlighted in the report is the increase in private equity-backed deals. Private equity firms were involved in 37% of all deals announced in Q1 2021, which is a significant increase from the 29% seen in Q1 2020. This trend is likely due to the availability of capital and low-interest rates, which have made it easier for private equity firms to finance deals.
Industry Analysis
The Q1Winkler Wall report provides a detailed analysis of M&A activity by industry. The report shows that the technology sector continued to be the most active sector in terms of deal volume, accounting for 22% of all deals announced in Q1 2021. The healthcare sector was the second most active sector, accounting for 16% of all deals.
One of the notable trends in industry analysis was the increase in activity in the consumer and retail sector. The report shows that there were 368 deals announced in this sector in Q1 2021, which is a 40% increase from the same period last year. This trend is likely driven by the shift in consumer behavior due to the COVID-19 pandemic, which has led to an increase in e-commerce and online shopping.
Another trend highlighted in the report is the increase in activity in the energy and power sector. The report shows that there were 197 deals announced in this sector in Q1 2021, which is a 25% increase from the same period last year. This trend is likely due to the increasing focus on renewable energy and sustainability, as well as the recovery of oil prices.
Valuations
The Q1Winkler Wall report provides insights into the valuations of M&A transactions in the US market. The report shows that the median EV/EBITDA multiple for all deals announced in Q1 2021 was 10.5x, which is a slight increase from the 10.3x seen in Q1 2020. The report also highlights that the median EV/EBITDA multiple for private equity-backed deals was higher at 12.5x.
One of the notable trends in valuations was the increase in mega-deals. The report shows that there were 25 deals announced with a value of over $5 billion in Q1 2021, which is a significant increase from the 15 seen in Q1 2020. This trend is likely due to the availability of capital and the increasing interest of companies in pursuing large-scale M&A transactions.
Another trend highlighted in the report is the increase in valuations in the technology sector. The report shows that the median EV/EBITDA multiple for technology deals was 14.2x, which is significantly higher than the median for all deals. This trend is likely due to the strong growth prospects of technology companies and the increasing importance of technology in the economy.
Outlook
The Q1Winkler Wall report provides insights into the outlook for the US M&A market for the rest of 2021. The report highlights that the market is expected to remain strong, driven by the availability of capital, low-interest rates, and improving economic conditions. The report also notes that there are several factors that could impact the M&A market, including regulatory changes, geopolitical risks, and the ongoing COVID-19 pandemic.
One of the notable trends in the outlook is the increasing interest of companies in pursuing ESG (environmental, social, and governance) initiatives. The report shows that there were 92 deals announced in Q1 2021 with an ESG component, which is a significant increase from the 48 seen in Q1 2020. This trend is likely due to the increasing focus on sustainability and social responsibility among companies and investors.
Another trend highlighted in the outlook is the increasing role of technology in M&A transactions. The report notes that technology is becoming increasingly important in due diligence, deal sourcing, and post-merger integration. This trend is likely to continue as companies seek to leverage technology to improve efficiency and gain a competitive advantage.
Conclusion:
The PitchBook Q1Winkler Wall report provides valuable insights into the US M&A market for the first quarter of 2021. The report highlights the strong deal activity, increasing cross-border deals, and the growing role of private equity firms in M&A transactions. The report also provides industry analysis, insights into valuations, and an outlook for the rest of the year. Overall, the report suggests that the US M&A market is likely to remain strong in 2021, driven by the availability of capital and improving economic conditions.
