3 Takeaways from 6 Months of Covid-19 Deal Data

In late March, Axial released the Coronavirus Lower Middle Market Deal Activity Dashboard to serve as a real-time indicator of ongoing financing and M&A activity in the LMM. 

The dashboard leverages Axial’s real-time anonymized member transaction activity up and down the deal funnel, surfacing deals in market, NDAs signed, LOIs submitted, and deal closures.  

We are now 6 months into the Covid era, with social, economic and public health norms disrupted and still reeling in many respects. March and April saw governments, cities, schools, businesses and families all batten down their respective hatches. By some counts, M&A was off by 85%. 

By July though, with the help of unprecedented government interventions and the arrival of many new hygiene and social distancing norms, we started to see some green shoots. 

Now that we are at the 6 month mark, we wanted to review the data, resurface the dashboard as a resource for all our members and newsletter subscribers, and highlight a few notable data points:

1. New Deals Going to Market Back on the Rise 

New deals brought to market on the platform hit an annual low in May before picking up steam in June, July, and most noticeably in August.

2. LOIs Executed Showing New Signs of Life After Dip in June

Alongside the increase in net new deals at the top of the funnel, there was also a consistent uptick in the number of LOIs executed at the bottom of the deal funnel over the last 3 months.

3. Investor Interest in New Deals Remains Flat

The monthly number of signed NDAs (proxy for investor appetite in new deals) started to recover in June and July after a dramatic drop-off in the first three months of the pandemic. However, executed NDAs trended downwards in August, inconsistent with the increase in new deals shared that same month.

For more trends on lower middle market deal activity from the Axial platform over the last 6 months, scroll through and hover over the real-time dashboard below.

**The dashboard surfaces anonymized member activity occurring on the Axial platform as of March 13th, 2020.