Industry Reports

Published on: 09/16/2020
Pre-COVID trends of rapid urbanization and aging water and wastewater infrastructure have been catalysts for innovation and advancement in the Water Infrastructure industry.  While COVID-19 has stressed revenues and financial visibility, it is accelerating the adoption of digital and remote technologies to drive effective asset management, efficiency, and cost reduction in water systems.
Published on: 09/03/2020
Weakened downstream chemicals demand among Automotive, Construction, and General Industrial markets were partially offset by steady demand for synthetic materials for non-wovens in personal protective equipment, disinfectants, pharmaceuticals, and food and beverage ingredients. Global merger and acquisition (M&A) activity in the industry fell 3.6% year-over-year (YOY) through July, with a notable slowdown in May. However, several notable deals in June and July indicate buyers are returning to the table, albeit with tightened criteria and valuation expectations.
Published on: 09/03/2020
While COVID-19 has severely hampered sales for medical device original equipment manufacturers (OEMs), the resumption of elective surgeries has begun to restore demand for devices and instruments.  Merger and acquisition activity in the Medical Device Outsourcing industry has stalled through the first half of 2020, with 19 transactions announced or completed year-to-date (YTD) compared to 46 deals in YTD 2019.
Published on: 08/27/2020
Capstone expects COVID-19 will accelerate adoption of nonprofit software by several years. The reallocation of focus towards digital fundraising and increased utilization of subscription giving are anticipated to generate higher transaction dollars for digital fundraising solutions.
Published on: 08/27/2020
COVID-19 has had a larger impact on HCM SaaS companies than the broader SaaS universe as hiring freezes, layoffs, and workforces moving remote caused significant segment disruption. However, as the country gets back to work, Capstone expects the HCM SaaS industry to rebound with some potentially new longer-term trends emerging as capabilities like remote employee management and increased use of outsourced contractors provide more staffing flexibility.
Published on: 08/19/2020
The COVID-19 pandemic has ignited a transformation in the Education industry by necessitating the widespread adoption of technological tools and validating the crucial role that education technology must play in both the short and long-term.  Operators in the space have also sought to fulfill the immediate needs of the evolving market.  Many education technology companies have offered online courses to assist the needs of the remote workforce and to provide training for teachers using distance learning methods and platforms.
Published on: 08/18/2020
Middle market (MM) lending activity came to a screeching halt in Q2 and only recently has new issuer volume returned, however, the focus initially has been on opportunistic, well-structured financings involving fundamentally sound businesses in recession-resistant sectors.
Published on: 08/18/2020
Merger and acquisition (M&A) activity fell in Q2 2020 to 473 deals for the quarter, better than Capstone expected, as transaction activity remained surprisingly high though deals tended to be smaller transactions at weaker multiples. Over the last twelve months, M&A activity reached a record 2,176 deals totaling over $150 billion despite a recent slowdown in deal activity and decline in public deal dollar volume.
Published on: 08/17/2020
 In Q2 2020, Echo Global Logistics (Nasdaq:ECHO) (“Echo”), C.H. Robinson Worldwide (Nasdaq:CHRW) (“CHRW”), and privately owned brokerages that Capstone spoke with have all said the same thing: Q2 was volatile.
Published on: 08/14/2020
Capstone maintains relationships with an extensive private equity network, which gives us access to unique buyer perspectives and industry insights.  We spoke with many of these private equity firms in Q2 to learn more about the current state of the Food & Beverage Distribution environment and COVID-19’s unprecedented impact on their respective distribution businesses.

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