this report is published twice a year and provides an
TRANSCRIPT
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This report is published twice a year and provides an update on M&A activity for the second half
of 2020 with a focus on global, national, and Pacific Northwest trends.
Selected transactions are profiled with an Enterprise Value (EV) generally between $10 million
and $50 million. Our data is sourced from PitchBook, GF Data, and other public resources.
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CHINOOK M&A DASHBOARD
GLOBAL M&A DEAL ACTIVITY AND VALUE REBOUNDED IN 2H 2020 Global M&A deal volume in 2H 2020 was in-line with 2H 2019.
There were 10,600 deals recorded in both periods according to a
report by Mergermarket, an M&A research group. Despite the
impact of COVID felt globally, deal volume rebounded 53% com-
pared to the first half of the year when only 6,900 transactions
were completed. Overall, 2020 deal volume decreased 15% to
17,545 transactions compared to 20,767 transactions in 2019.
Deal value told a different story in 2020. Global deal value in-
creased 48% in the second half of 2020 to $2.1 trillion compared
to $1.5 trillion in the second half of 2019. With the slowdown of
activity in the first half of 2020 of $966 billion, deal value in-
creased 127% in the second half of the year. 2020 annual deal
volume was $3.1 trillion, a 7% decline from $3.4 trillion in 2019.
2020 presented an interesting dichotomy of trends with respect
to deal values. 2020 “mega-deals”, or transactions over $5 billion
in value, surged 22% to an all-time high of 111 transactions. On
the other hand, deals valued under $250 million declined 12%
compared to 2019.
As the world continues to reel from the economic effects of
COVID, M&A activity remains healthy.
GLOBAL M&A ACTIVITY (2014-2020)
The Chinook Report
Source: Mergermarket Global & Regional M&A Report 2020
U.S. M&A ACTIVITY FOLLOWED SIMILAR GLOBAL TRENDS 2H 2020 U.S. M&A deal volume grew 4% to 5,933 from 5,722 in
the same period last year, according to PitchBook. U.S. M&A deal
value was $857 billion during the second half of the year, nearly
20% lower than $1.1 trillion in 2H 2019.
Overall, 2020 U.S. deal volume and values followed global trends
as compared with 2019: volumes were down 5% from 11,583 to
10,956 while value dropped 20% from $2 trillion to $1.6 trillion.
The encouraging uptick in M&A activity in the second half of 2020
illustrated the reality that deals could close during the COVID
period. Public markets continue reached record highs in 2020.
For example, the S&P 500 grew 18% despite a 32% drop in 2Q
2020.
As a result of the November 2020 elections, the Biden administra-
tion has proposed tax legislation that includes the following
changes:
1. Doubling the top capital gains rate from 20% to 39.6% for
individuals with $1M or more in adjusted gross income;
2. Raising the top ordinary income tax rate from 37% to 39.6%;
and
3. Boosting corporate income tax rate from 21% to 28%.
While the new administration has a pathway to enact legislation
with control of both the House and Senate, it remains to be seen
when new tax legislation will be signed into law. Concerns over
potential tax increases is a driving force for 2021 deal activity.
U.S. M&A ACTIVITY (2008-2020)
Source: PitchBook 2020 Annual North American M&A Report
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U.S. PRIVATE EQUITY DEAL ACTIVITY CLIMBED IN 2H 2020 U.S. private equity deal volume during 2H 2020 rose 15% to 3,119
transactions, compared to 2,703 in the same period last year. In
addition, deal value also rose to $422 billion, a 16% increase com-
pared to $364 billion in 2H 2019.
Overall deal volume dropped 21% to 4,334 transactions during
2020 compared to 5,495 in 2019, according to PitchBook. Overall
deal value dropped 27% to $561 billion in 2020 compared to $764
billion last year.
Despite the decline in activity, private equity firms continue to
look for opportunities, especially in COVID-resistant industries
such as e-commerce, technology, and healthcare services. To
“normalize” 2020 performance, sellers and their advisors are fo-
cusing on earnings adjusted for the COVID impact. To learn more,
please read our article, “How COVID is Impacting Private Compa-
ny Valuations.”
U.S. PE DEAL ACTIVITY (2008-2020)
FUNDRAISING STALLS FOR U.S. PRIVATE EQUITY FIRMS Despite COVID headwinds, private equity funds raised $203 bil-
lion in 2020, 37% lower than the record $321 billion in 2019.
U.S. PE ANNUAL FUNDRAISING ACTIVITY (2008-2020)
Source: PitchBook Annual 2020 US PE Breakdown
CUMULATIVE DRY POWDER STILL ABOVE $700 BILLION Private equity funds continue to stockpile record amounts of dry
powder for acquisitions; since these funds will need to be de-
ployed in a finite period, the push to find portfolio companies and
add-ons that fit within their investment theses continues.
Through June 2020, cumulative dry powder in the United States
remained steady at $721 billion, a decrease of 2% from the previ-
ous year.
U.S. CUMULATIVE DRY POWDER (2008-2020)
LOWER-MIDDLE MARKET EBITDA MULTIPLES PAID BY PRIVATE EQUITY DROP SLIGHTLY Average EBITDA multiples paid in 2020 by private equity groups
for companies with an enterprise value between $10-25 million
dropped to 6.0x, lower than the full-year 2019 average of 6.2x.
EBITDA MULTIPLES
*2020 through June 30 Source: PitchBook
Source: PitchBook Annual 2020 US PE Breakdown
in Billions
Source: GF Data M&A Report February 2021
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2H 2020 PACIFIC NORTHWEST DEAL VOLUME JUMPED FROM 1H 2020 DROP Total deal volume in the Pacific Northwest decreased 12% to 161
transactions in the second half of 2020 compared to 182 during
the same period last year. Compared to the first half of the year
with 133 transactions, deal volume increased 21%. Annually,
2020 Pacific Northwest deal volume dropped 14% compared with
2019.
PACIFIC NORTHWEST DEAL VOLUME
BUSINESS SERVICES AND TECHNOLOGY DEALS LEAD PACIFIC NORTHWEST REGION Business Services and Technology transactions led Pacific North-
west M&A activity during the second half of 2020, similar to previ-
ous periods.
2H 2020 PACIFIC NORTHWEST DEAL ACTIVITY BY IN-DUSTRY
Source: PitchBook
PRIVATE EQUITY BUYERS REPRESENTING LARGER SHARE OF PNW DEALS On average, private equity transactions have represented 35% of
deal activity in the Pacific Northwest. However, during the second
half of 2020, private equity transactions represented 46% of all
activity, the biggest percentage over the past three years.
PACIFIC NORTHWEST DEAL ACTIVITY BY INVESTOR TYPE
Source: PitchBook
Source: PitchBook
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Select PNW Transactions
Date Target Buyer Description
Business Services
Dec-20 Labels West
Woodinville, WA
Resource Label Group
PE-Backed, TPG Growth
Provider of label printing services for the wine, spirits,
health and beauty, food and nutraceutical industries.
Nov-20 Puget Sound Security Patrol
Bellevue, WA
PalAmerican Security
Private
Provider of contract security solutions with a customer
base that represents a diverse array of industries .
Oct-20 Bonfire Marketing
Portland, OR
Thesis
Private
Operator of a digital content agency specializing in mar-
keting for technology clients.
Oct-20 Magellan Insulation
Kent, WA
Installed Building Products
Public, NYS: IBP
Provider of waterproofing and firestopping insulation
services to commercial and multi-family customers.
Sep-20 FloHawks
Puyallup, WA
Liquid Environmental Solutions
PE-Backed, Audax Group
Provider of commercial and residential pumping and
septic services in the Pacific Northwest.
Sep-20 Clearview Cleaning Service
Garden City, ID
Kellermeyer Bergensons Services
PE-Backed, Cerberus Capital Mgmt.
Provider of commercial cleaning and custodial ser-
vices.
Aug-20 Apply-A-Line
Pacific, WA
Frontline Road Safety
PE-Backed, The Sterling Group
Provider of striping solutions for highways, roadways,
bridges, and airfields.
Jul-20 Orca Pacific
Seattle, WA
MightyHive
Private
Provider of Amazon marketing and advertising services
with machine learning software.
Consumer Products & Retail
Dec-20 Pohl + Schmitt
Portland, OR
Mohawk
Public, NAS: MWK
Manufacturer and retailer of home and kitchen appli-
ances for consumers.
Oct-20 Baratza
Bellevue, WA
Breville Group
Public, ASX: BRG
Manufacturer and retailer of coffee grinders that are
sold through online and retail channels.
Sep-20 Seattle Coffee Gear
Lynnwood, WA
Digital Fuel Capital
Private Equity
Omni-retailer of coffee equipment, whole bean coffee,
and other accessories and repair services.
Jul-20 Skull Hooker
Klamath Falls, OR
GSM Outdoors
PE-Backed, Sentinel Capital Ptrs.
Manufacturer and designer of skull mounting bracket
for hunters to showcase skull capped trophies.
Distribution
Dec-20 CDA Metals
Spokane, WA
Norfolk Iron & Metal
Private
Distributor and processor of metals including various
grades of aluminum and stainless steel.
Dec-20 Utility Supply Group
Kingston, WA
Rexel USA
Subsidiary, Rexel
Supplier of electrical products and components for RV
parks and marinas.
Nov-20 Manor Hardware
Lynnwood, WA
SouthernCarlson
Subsidiary, Kyocera
Supplier of construction tools and accessories, helping
customers with their general hardware needs.
Sep-20 Pacific Topsoils
Everett, WA
GRO-WELL Brands
PE-Backed, GEF Capital Partners
Supplier of landscape materials for homeowners and
landscape contractors.
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Date Target Buyer Description
Aug-20 Silver Creek Supply
Boise, ID
Heritage Landscape Supply Group
Private
Wholesaler and supplier of irrigation and plumbing
products for professional contractors.
Food & Beverage
Dec-20 Jade Leaf Matcha
Seattle, WA
WM Partners
Private Equity
Provider of organic Japanese matcha green tea prod-
ucts as well as blended products.
Dec-20 Truitt Bros
Salem, OR
Baxters
Subsidiary, Northern Foods
Provider of services to food companies for producing
thermally processed shelf-stable food products.
Dec-20 Sweet Green Fields
Bellingham, WA
Tate & Lyle
Public, LON: TATE
Producer of natural sweetener, food beverage, food
additives and organic sweetener.
Jul-20 Coconut Bliss
Eugene, OR
HumanCo
Private Equity
Producer of dairy-free ice cream intended to provide a
healthy alternative to frozen desserts.
Jul-20 Cascade Coffee
Everett, WA
Westward Partners
Private Equity
Provider of specialty coffee roasting and packaging
services to coffee labels.
Healthcare Products & Services
Dec-20 Enli Health Intelligence
Beaverton, OR
Cedar Gate Technologies
PE-Backed, GTCR
Provider of population health management services
through a software platform.
Dec-20 MD Squared
Bellevue, WA
NexPhase Capital
Private Equity
Provider of concierge medicine healthcare services
intended to deliver a high level of personal care.
Dec-20 HealthSparq
Portland, OR
Kyruus
VC-Backed
Provider of information services about hospitals and
medications to commercial and Medicaid sectors.
Oct-20 NATURELO Premium
Seattle, WA
Arcadia Consumer Healthcare
PE-Backed, Avista Capital Ptrs.
Provider of wellness products including vitamins, miner-
als and supplements for total-body health.
Sep-20 VitalWare
Yakima, WA
Health Catalyst
Public, NAS: HCAT
Developer of a cloud-based SaaS platform designed to
easily document, code, and audit healthcare records.
Manufacturing
Dec-20 Frontier Packaging
Tukwila, WA
Gen Cap America
Private Equity
Manufacturer and distributor of packaging materials for
the Pacific Northwest and Alaska seafood industry.
Dec-20 Viper Northwest
Albany, OR
Precinmac
PE-Backed, Compass Partners
Manufacturer of precision fabricated, machined parts
and assemblies serving various industries.
Jul-20 Preco Electronics
Boise, ID
Sensata Technologies
Public, NYS: ST
Designer and manufacturer of electronic products in-
cluding blind spot and camera monitoring systems.
Technology
Dec-20 Panopto
Seattle, WA
K1 Investment Management
Private Equity
Developer of a video management platform designed to
make video sharing and creation easy.
Dec-20 Covestic
Kirkland, WA
Milestone Technologies
PE-Backed, H.I.G. Growth Ptrs.
Provider of IT operations and services intended to help
clients realize greater value from their technology.
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Date Target Buyer Description
Dec-20 Integrated Services
Portland, OR
Fullsteam
PE-Backed, Aquiline Capital Ptrs.
Provider of point-of-sale and management software
services intended for the car wash industries.
Dec-20 Audienz
Seattle, WA
The Channel Company
PE-Backed, Harris Preston & Ptrs.
Provider of cloud consultancy and marketing services
for leading technology companies.
Oct-20 Pipeworks
Eugene, OR
Sumo Digital
Public, LON: SUMO
Developer of multi-player video games including AI-
driven simulations and action games.
Sep-20 Syn-Apps
Portland, OR
Intrado Corp.
PE-Backed, Apollo Global Mgmt.
Provider of IOT and mass notification software in a
single easy-to-use interface.
Sep-20 Seattle Avionics
Woodinville, WA
AFV Partners
Private
Developer of aviation software intended to help pilots
create flight plans faster and easier flight plans.
Aug-20 Cayuse
Portland, OR
Bratenahl Capital Partners
Private Equity
Operator of software intended to increase transparency
across all points of the research lifecycle.
Aug-20 RocketReach
Bellevue, WA
Brighton Park Capital
Private Equity
Operator of a platform intended to search for contact
information and connect with business prospects.
About Chinook Capital Advisors
Chinook Capital Advisors, based in Kirkland, WA, is a leading M&A advisory firm serving the needs of Pacific Northwest business own-
ers. We help businesses prepare for and execute business ownership transition events.
Our expertise includes sell-side advisory/seller representation services, recapitalizations, advisory board/transaction preparation ser-
vices, and other services including business valuation and debt advisory. Chinook serves many of the key industries that drive the Pa-
cific Northwest economy, including manufacturing, distribution, business services, technology, healthcare products & services, and
consumer products & services.
We welcome inquiries from business owners wanting to discuss business valuation, M&A market updates, or how to build value to-
wards a future exit or recapitalization.
John O’Dore
Co-Founder
O: 425-576-4168
C: 425-985-7617
Ed Kirk
Co-Founder
O: 425-576-4166
C: 425-753-0989
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