How has Covid-19 impacted mergers and acquisitions in 2020?
SI Partners Tristan Rice gives his latest update on the state of play in the global creative and technology M&A market.
In many ways, marketing M&A in 2020 has begun exactly as predicted: with an increasing focus on customer data and analytics, performance marketing, and tech-enabled agency models that increase the speed and efficiency of customer engagement. All fuelled by acquirers from diverse backgrounds, including a seemingly endless supply of private equity money.
Of course, the effect of the Coronavirus is being felt by every business and those that rely on brand marketing spend are certainly no exception. As demand falls, marketing budgets are often the first to go. And that means lower revenues and profits for agencies, which can make M&A deals unattractive for buyers and sellers alike.
However, the strategic drivers for M&A aren’t going anywhere – if anything, a shock to the system could accelerate the pace of change to more efficient operating models. And in turn, that will lead to increased M&A demand.