Global advisory firm Stout has released its plastics industry update year in review for 2020, noting that despite the ongoing COVID-19 crisis, plastics M&A activity rebounded during the second half of 2020 with positive momentum continuing into 2021 with strong buyer demand and access to capital.
From a buyer’s perspective, there continues to be significant equity capital available for transactions from private equity groups and many strategic buyers, most of which have been open for business during the pandemic. From a seller’s perspective, valuations continue to be strong, largely due to significant demand from the buyer universe and somewhat of a scarcity of transactions over the past several months. Potential tax law changes with the new administration could also have an impact on the number of transactions in 2021 and overall timing throughout the year.
Other key themes from 2020 include continued low cost of capital environment for transactions, levels of impact from COVID-19 varied – from no impact at all to significant disruption, many plastics industry manufacturers that were impacted by COVID-19 have since rebounded, historic declines in the stock market since the trough in March 2020, an increase in special situations M&A, and depressed consumer confidence and unemployment negatively impacting key macroeconomic indicators.
The update discusses highlights from Stout’s proprietary M&A database, including buyer and seller trends, end market activity, activity by process and activity by geography. Market trends analyzed include plastics industry multiples, commodity prices and macroeconomic metrics.
For more information, visit https://www.stout.com/en/insights/industry-update/plastics-industry-update-year-review-2020.