M&A Market Reviews: Logistics and Supply Chain sector
20 January 2021
2020 Q4 Logistics & Supply Chain Sector M&A Snapshot - Transactional activity returns strongly
Despite the uncertainty that continued in the run up to the end of 2020, Q4 proved a particularly active period for transactions. Quarterly deal volumes were back at a level consistent with 2019, with 15 transactions completed and some notable names. Meanwhile, the BDO Logistics Index has bounced back to levels 39% ahead of where our index started in July 2019. In comparison, the FTSE All-Share Index is 12% down over that period, reflecting the sector’s role at the forefront of keeping the economy moving and its ability to adapt service requirements to meet the demands of the changing economic dynamics.
Activity is still being driven by the demand for scale to drive efficiencies, access to key technologies, and growth opportunities across certain markets such as e-commerce, food and drink and international freight. We may also see supply chain opportunities as the focus on increased infrastructure spend starts to come through.
As we enter 2021 and work though the impact of the Free Trade Agreement with the EU, we anticipate continued deal activity. With the growth opportunities in this changing environment, my expectation is that the investment appetite from equity institutions will continue to accelerate where points of differentiation can be demonstrated around technology and service. Meanwhile, the drive for efficiencies through consolidation will continue, and the visibility that the trade deal will ultimately provide may open the door to further pan European interest.
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Previous M&A annual reports and market snapshots for the logistics and supply chain sector: