PitchBook Analyst Note: M&A and CVC in an Economic Downturn

What investors and acquirers can learn from the global financial crisis

Both public and private markets experienced a period of decline during the 2007-2008 global financial crisis. However, corporate M&A and investment activity remained relatively resilient due to factors like record levels of capital on corporate balance sheets and a venture ecosystem that attracted nontraditional participants.

In our latest analyst note, we compare the global financial crisis to current market conditions and describe the opportunities and benefits of corporate dealmaking in a difficult economic climate. For example, valuation declines have lowered the “entry cost” for corporate acquirers and investors, allowing many to make strategic plays that may have previously been out of reach. Additionally, corporations with more favorable capital structures relative to their competitors may be able to pursue innovation at a quicker pace.