The COVID-19 pandemic has slowed down a multiyear streak of white-hot activity for plastics M&A.
Plastics and packaging deal volume fell by almost one-third in the first half of 2020, dropping from 169 to 115, according to P&M Corporate Finance of Southfield, Mich.
Major declines were seen in April with only 11 deals and May with only six deals. The market rebounded strongly in June, however, when 25 deals were recorded.
Based on end market, large drops were posted in food and beverage, where deals fell from 37 to 13, and medical, with only 10 deals in the first half of 2020 vs. 19 in the same period in 2019.
By sector, the number of film deals plummeted from 32 to 12, with injection molding deals down from 50 to 29, according to PMCF. Based on product segment, the number of flexible packaging deals tumbled from 29 to eight, with rigid packaging deals swooning from 21 to 10.
This decline played out against a backdrop that saw U.S. GDP fall 5 percent in the second quarter, with an astonishing loss of 40 percent or more expected for the second quarter, as COVID-19 shutdowns affected global trade. The Dow Jones Industrial Average also fell more than 9 percent in the first half of 2020, with the broader S&P 500 down more than 3 percent.
PMCF Managing Director John Hart said the strong July totals were an encouraging sign. "Buyers are getting more confident with post-COVID-19 conditions," he added.