Deal volumes surge by 69%, BDO finds

Deal volumes surpassed pre-pandemic levels with a 69% rise in the first three quarters of 2021, BDO’s latest PCPI Index revealed. 

Deal volumes were up 22.5% in Q3 and they also exceeded pre-pandemic levels, up 15% and 18% on 2018 and 2019 respectively. 

BDO said the increase was reflected equally across trade and private equity activity, with trade volumes rising by 22.7% to 622 deals, and private equity transactions by 21.2% to 103 deals.

Deal volumes in the first three quarters of 2021 exceeded the total for 2020 and the full year result is expected to be “one of the strongest seen for years”, said BDO.

Additionally, deal volumes reportedly strengthened in Q3 as activity “intensified”. Trade multiples settled again on 10.6x compared to 10.2x in Q2, while private equity multiples increased to 12.4x from 11.8x in Q2. 

The FTSE All-Share Index reportedly climbed higher with a multiple of 18.0x, “reflecting the positive forward-looking profit expectations of the stock market”.

Roger Buckley, M&A partner at BDO, said: “The recovery of markets and volume of money in the marketplace continue to drive both trade and private equity M&A activity. Times of change create opportunity and we’re seeing an incredibly active M&A market and a competitive environment for buying. 

“Quoted companies, large private entities, PE and debt markets are all open for transactions as they seek to grow on a non-organic basis, reposition their businesses post-pandemic and consolidate marketplaces.”