Private Company Price Index (PCPI)
04 February 2021
PCPI Q4 2020: Impressive levels of M&A activity in Q4
2020 was a year like no other, and yet following the Q2 lockdown shock, the M&A market showed a remarkable recovery, with deal volumes picking up in Q3 then soaring impressively in Q4. In total, 717 transactions completed in Q4, up from 408 in Q3, representing a 76% increase. Trade volumes also rose from 338 in Q3 to 592 in Q4, while PE volumes nearly doubled to 125 (from 70 in Q3).
Q4 volumes represented the highest levels recorded for two years for trade, and the highest since Q2 2016 for private equity. The quarter made an important contribution to the year, resulting in overall 2020 volumes down by just 14.5% compared with 2019. While these are the lowest volumes seen since 2014, a longer-term view reveals that the global pandemic and ongoing Brexit uncertainty had relatively little impact on the M&A market overall.
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PCPI blog: “We’d like to make you an offer...” and the eight stages that lead to those seven magic words
For founders raising venture capital there are seven magic words they long to hear, “We’d like to make you an offer…” Most venture capital funds will claim to have a “unique” process but they usually share most or all of eight common stages. Assistant Director, Adam Baron, outlines what is involved in each stage and where it fits in the overall process for the funds.
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Each quarter we collect data surrounding Enterprise Value (EV) to Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) multiples. The Index tracks the EV to EBITDA multiples paid by trade and private equity buyers when purchasing UK private companies.
We examine this market data and compare it with historic data to identify key trends. We draw on our long experience of running the PCPI and our sector-specific expertise to predict future market trends.
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