International deal activity higher than pre-Covid volumes - pent-up demand or underlying growth?

International deal activity remains ahead of pre-pandemic levels in Q2 2021, according to the latest analysis from RSM*. 

All countries** were up in Q2 when compared to the average total deal volumes over 2018 and 2019. Europe saw 2,403 deals (7 per cent higher than the 2018 and 2019 average) and the US saw 3,085 deals (4 per cent higher). Unsurprisingly, data shows that there has been some reduction from the bumper Q1 2021 performance (Europe 2,866, US 3,244), but activity remains strong.  

The UK saw the strongest bounce back in activity following the Covid shock, up 103 per cent when compared to Q2 2020; with the US and France both recovering well with a 72 per cent increase in deals. In part, UK activity levels in Q1 2021 were helped by the threat of capital gains tax increases. 

Commenting on the data, Lee Castledine, RSM UK partner and a member of RSM's Global Due Diligence Leadership Team, said: ‘The spike in deal activity in Q1 2021 obviously reflects a degree of catch up as the world reopened. 

‘Although deal volumes have softened in Q2 from record-breaking levels that is not surprising.  Activity remains strong, supported by the volume of available capital and reflects the ongoing appetite of both private equity and corporates to take advantage of opportunities as we emerge from the pandemic.   

‘It will be interesting to see if elevated deals volumes continue throughout the remainder of the year and the extent to which Q2 data reflect completion of deals held over from the pandemic. Certainly Q3 feels busy for us in terms of due diligence activity as investors and businesses explore new opportunities.’

*Deal volume data source: https://pitchbook.com/ PitchBook Data, Inc.; Data has not been reviewed by PitchBook analysts.

** Analysis covers all deals in the UK, Germany, France, Netherlands, Spain, Italy and the US.