State of Middle Market M&A 2020

Capstone conducts an annual survey of company owners and executives to elicit their perspective on mergers and acquisitions (M&A) and external growth in the middle market. The 2020 report is our seventh in this series.

Key Findings

  1. Growth was generally positive in 2019. In their industries, most respondents (71%) reported modest growth, similar to 2018 data (73%).
  2. Respondents who engaged in M&A in 2019 dropped (from 52% to 41%) when compared to 2018.
  3. Participants observed similar levels of M&A activity in both 2018 and 2019 with 38% and 35%.
  4. Acquisition remains the most popular form of external growth, with a whopping 59% in 2019 compared to 49% in 2018.
  5. Time and attention demanded by the process (34%) and lack of suitable companies to purchase (40%) were the top 2 barriers to M&A faced by participants.
  6. Of the 41% who pursued M&A in 2019, the majority executed acquisitions (58%).
  7. The top driver for pursuing M&A in 2020 is to increase share of existing markets (71%).

M&A Activity Remains Modest, and COVID-19 Will Likely Impact 2020

As anticipated in last year’s State of the Middle Market M&A Report, the acquisition activity in 2019 did not reach the 2018 levels. The number of respondents who engaged in M&A in 2019 dropped from 52% to 41% when compared to 2018. Global merger and acquisition activity hit $3.9 trillion in 2019 according to data provider Refinitiv. This represents a 3% decrease from 2018. Activity was majorly driven by megadeals (transactions valued at more than $10 billion). Megadeals represented 31% of the global total, a sizable jump from 2018. In this year’s survey, participants are still positive about growth in their industries. Compared to last year, a greater percentage of respondents are certain they will pursue M&A this year (21% compared to 11%). Given the responses from our survey participants and our own observations of the marketplace, we predict M&A deals to be significantly down from 2019. According to Dealogic, the global M&A market is already set for its slowest first two months of a year since 2005. Analysts, state that coronavirus (COVID-19) fears will further impact the M&A market.

Read the full report


State of Middle Market M&A 2020 Read Report
State of Middle Market M&A 2019 Read Report
State of Middle Market M&A 2018 Read Report
State of Middle Market M&A 2017 Read Report
State of Middle Market M&A 2016 Read Report
State of Middle Market M&A Q1-Q3 2014 Update Read Report
State of Middle Market M&A 2014 Read Report