2021 Outlook: M&A and Capital Markets

After the uncertainty and challenges presented by the pandemic in 2020, M&A and capital markets activity is beginning to ramp back up. Get the 2021 outlook from Bridgepoint Founder and CEO Matt Plooster in the short video below, and read on to find out the four major factors influencing M&A activity and the capital markets this year.

 

  1. Funders Have Capital to Use. Dry powder, or the liquid assets available for use by private equity firms and other funding sources, is at an all-time high. Dry powder has been building up over the last ten years, creating an overhang of capital ready to be invested. The pandemic further accelerated this build-up, and funding sources are eager to put this capital to use. 
  2. Valuations Are Holding Steady. Though valuations were thought to be down due to the pandemic, valuations are actually holding steady. In fact, valuations are even exceeding pre-pandemic levels for some companies that showed resilience in the face of COVID. 
  3. Potential Changes to the Tax Structure. If you’ve been considering selling your company, it’s important to realize that this is a one-shot opportunity to maximize the value of your life’s work. With the new presidential administration, several potential changes to tax policy have been proposed. Learn more about the proposed changes to the U.S. tax policy in our latest whitepaper here.
  4. Capital Markets Have Reopened. Though the capital markets largely went away during Q2 and Q3 2020, the fourth quarter was extremely busy as uncertainty began to recede and activity accelerated. The availability of aggressive capital structure is back, and companies should get their capital structure in order in 2021. There is expected to be a flurry of M&A activity this year.

These four major factors are expected to combine into a “perfect storm” in 2021, and all signs point to a record year for capital raising and M&A activity. 

To learn more about how the 2021 climate may impact the decision to sell your company, download our free whitepaper here.

If you’re considering raising capital or selling your business in 2021, it’s imperative to engage a team of M&A experts that will guide you with unconflicted advice you can trust. Bridgepoint Investment Banking can help you maximize the timing and drivers in the market to create the best outcome for you. Contact Bridgepoint today and let us help you navigate the process of selling or capitalizing your company in 2021.

Download Our Free Whitepaper

Find out which major factors can impact the sale of your company in 2021 with our free whitepaper, "How the 2021 Climate Impacts the Decision to Sell Your Company." Download now!

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