Boston, MA – Capstone Headwaters released its October Packaging update today, reporting merger & acquisition (M&A) activity has outpaced 2019 volumes by approximately 8% through September, primarily due to a 75% increase in Q1 year-over-year (YOY) activity. As the coronavirus induced uncertainty in capital markets, deal activity dropped sharply in Q2 and then began to pick up again in Q3. The resilience and heightened need for packaging and labeling solutions presents favorable dynamics for strategic and private equity-backed consolidation. Packaging providers serving essential and non-discretionary end markets are poised to attract interest from strategic buyers looking to bolster defensibility and product lines as well as private equity firms seeking steady cash flow businesses with proven resilience.
“We continue to witness strong interest from strategic buyers and financial sponsors in packaging acquisitions despite the pandemic and some softness in the debt markets. Private companies we are working with have held up remarkably well and are positioning for M&A processes in early 2021,” commented David Bench, Managing Director at Capstone Headwaters.
The Packaging industry has displayed resiliency during COVID-19, driven by the accelerated adoption of e-commerce, consumer pantry loading, and demand for healthcare, pharmaceutical, and hygiene packaging solutions. Despite a challenging economic climate, packaging providers have continued to attract demand in defensible end markets while experiencing softness in industrial markets and discretionary goods.
Capstone Headwaters expects deal activity to remain upbeat with ample private equity dry powder, favorable consumer and healthcare dynamics, and heightened emphasis on driving innovation through sustainable and recyclable solutions for the remainder of the year and into 2021.
ABOUT CAPSTONE HEADWATERS
Capstone Headwaters is one of the largest and most active independent investment banking firms in the United States. The firm has a rich 15+ year history of achieving extraordinary results for middle market entrepreneurs, business owners, investors, and creditors. Capstone offers a fully integrated suite of corporate finance services, including merger & acquisition, debt & equity placement, corporate restructuring, valuation & fairness opinion, financial advisory, and ESOP advisory services. Headquartered in Boston, the firm has 150+ professionals across 16 offices in the U.S., with and an international presence including over 450 professionals in 40 countries. With 16 dedicated industry groups, the firm delivers sector-specific expertise through large, cross-functional teams on a global basis. Capstone has been named “U.S. Middle Market Investment Bank of the Year” for the past 9 consecutive years and is consistently recognized as one of the top investment banking firms to work for. For more information, visit www.capstoneheadwaters.com.
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