Even before the COVID-19 pandemic drove widespread stay-at-home orders, 2020 was shaping up to be a challenging year for larger security dealers. As SDM reported last year at this time, at least two banks that had been major lenders to those dealers had either stopped making new loans or had begun imposing terms that were less favorable to the dealers. And there were concerns that this might have a ripple effect by reducing the number of buyers in the market, thereby reducing how much remaining buyers would pay for new acquisitions.
It’s hard to tell how big that ripple effect would have been, because the COVID-19 pandemic put numerous pending deals on hold. Today, however, sources involved in the financial side of the security industry see acquisitions resuming, and some even see values in the range of what they were seeing before the pandemic.