Middle market merger and acquisition deal activity made a sizeable comeback in 1H 2021. The frenetic pace of dealmaking is being driven by continued economic recovery, even in the face of the Delta variant of COVID-19, strong demand from buyers of all types with ample dry powder to invest, buoyant public market valuations, the return of inexpensive debt, and sellers motivated by the possibility of capital gains tax rate increases. The Q2 2021 data for lower middle market deals (<$250 million total enterprise value) indicates that deal volume, valuations and use of leverage have all returned to pre-pandemic levels (Source: GF Data’s August 2021 M&A and Leverage Reports).
