The Private Equity Info Research Database currently tracks 348 current portfolio companies in the Packaging space. These companies are collectively held by 259 private equity firms.
16 of these private equity firms hold at least 3 platform investments in packaging companies in their current portfolio.
Covid-19 forced a tectonic shift in how we work and where we work. With more people working from home, many companies took this opportunity, while already disrupted, to relocate their corporate headquarters.
A common sentiment heard on zoom calls, “The home office approach is working better than we expected. Maybe we don’t really need an office downtown.”
“Maybe we don’t need to be in this state,” was the reply.
Consequently, some firms relocated.
Anecdotal conversations around the M&A community suggest a lot of firms left New York and moved to Florida, Texas and Colorado. But what does the data show?
We compared the headquarter locations of private equity firms in our M&A Research Database in January 2000 to March 2021. The chart below shows the migrations of private equity firms over the past 15 months, by state.
I thought it would be interesting to look at the trends in private equity platform acquisitions year-by-year, since 2000. The graphs below represent 47,394 private equity platform acquisitions over the last 21 years.
We can clearly see the dip in new acquisitions during the dot.com bust (2001 – 2003), the last recession (2009), the skittishness of 2019 (Q4 mostly), and the pandemic of 2020.
As we reported in our year-end review: Top 10 Industries for PE Platform Investments in 2020, Software was the #1 industry of interest for private equity firms in 2020, as a percentage of all PE platform acquisitions.
The graphs below show the steep increase in private equity acquisitions in both Software and SaaS companies.
While private equity firms acquired considerably fewer companies in 2020, PE investments in healthcare, as a percentage of total PE platform acquisitions, increased significantly in 2020, now pushing 9% of total PE platform acquisitions.
Private equity firms are increasingly interested in scalable companies with lower CapEx requirements. Consequently, private equity acquisitions of manufacturing companies has steadily declined as a percentage of the total number of private equity platform investments.
We reviewed all private equity platform investments in 2020 and ranked them by industry. The following Top 10 industries represent nearly a third of all private equity platform deals in 2020:
TOP 10 INDUSTRIES
Before the era of personal computers, companies used “Mainframes” for large centralized computing. In the 1970s and ’80s, individual users could access the Mainframe from the terminal on their desk. The rise of the personal computer placed the computing power and storage on our desks. Hence, the term “desktop computer”.
In a sense, cloud computing is a return to the Mainframe style of computing. That is, accessing remote resources (servers, databases, digital storage capacity, software, etc.) over the internet through the terminal of our personal computers.
By sharing large pools of resources, cloud computing offers advantages of reduced cost, increased scalability, massive computing power, and greater reliability.
Cloud computing also enables flexibility with remote work practices, a common theme in 2020. This general transition to cloud computing coupled with the accelerated shift to remote work has created a surge in the already-growing, global cloud computing industry.
While there are many private equity investments in companies that offer cloud-based, SaaS solutions, surprisingly, we do not see many recent private equity investments in the pure cloud computing space.
The PEI M&A Research Database shows 481 private equity platform transactions in medical device companies:
Of the 185 current investments in medical device companies, the most active private equity firms for platform investments are:
Private equity platform investments in Software-as-a-Service companies increased significantly in 2020YTD as a percentage of all PE deals. Many SaaS companies have been less negatively impacted by the economic impacts of the coronavirus compared to other industries, both in terms of continued demand for their product or service as well as the agility to continuing operations, working from home. In many cases, SaaS companies have benefitted by the sudden change in industry dynamics.
Industry Trends Report
