GulfStar Middle Market Commentary – First Half of 2020

Middle market merger and acquisition (M&A) deal activity continues cautiously as owners wade through the aftereffects of COVID-19, Paycheck Protection Program (PPP) loans, and the tax implications of an election year. Market data through June provides an unsurprising view of the M&A environment in the months following the onset of the pandemic – flat valuations, dramatic decrease in deal volume, and less available debt. It will likely take another two or three quarters for market data to reflect transactions that would have closed this spring yet went on hold as a result of unfavorable market conditions related to COVID-19. Meanwhile, M&A practitioners continue to monitor client performance on a situational basis as they weigh which deals to bring to market.