By: Gene Bazemore
According to Capital IQ and Founders’ proprietary sources, M&A and private placement activity in the second quarter of 2020 decreased roughly 46% versus the same quarter in the previous year. While high quality assets continue to trade, many businesses are electing to delay transactions. Private equity buyers are taking a more conservative approach, focusing on portfolio companies. Additionally, uncertainty around the future has caused lending to slow, with a corresponding effect on value. Many of the transactions that did close in Q2 were already in process pre-COVID slowdown, therefore we anticipate drag on effects from the slowdown into Q3.
Transaction activity in the Dallas – Fort Worth market continues to be diversified with Industrials, Financial, and Healthcare representing the top three sectors by volume. Overall, there were an estimated 72 transactions involving companies from the Dallas – Fort Worth area completed in the second quarter of 2020. Most of the transactions were sub $100 million in enterprise value; one of the largest transactions announced was the acquisition of eRx Network, LLC by Change Healthcare Inc. (Nasdaq:CHNG) for $213 million.