Covid certainly had a sudden and material impact on M&A in the sector. After a strong Q1 where deal activity was ahead of 2019, deal volumes halved in Q2 2020. We did however see a positive resurgence in Q3 and Q4, with deal volumes back up to about 70% of 2019 levels. Despite deal volumes being down, we continue to see multiples at pre-Covid levels for strongly performing businesses in the space. Demand has been particularly high for capabilities including data & analytics consultancy, performance marketing, Amazon and ecommerce, digital transformation and content creation at scale.
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Amongst the public companies, the large networks have recovered since the downturn in March but are for the most part still trading below their pre-Covid levels. There are certain outliers amongst the mid-caps, notably S4 Capital which has decoupled its performance from the broader sector. The consultancies have also recovered and as a group are trading ahead of where they were pre-Covid.
The pace of change in the industry is only accelerating; automation, data privacy and the continued expansion of the major platforms (Amazon, Facebook, Google and Apple) are creating challenges for brands and opportunities for digital agencies. As a result, and despite uncertainty and challenges in certain areas of the market, we are confident that we will continue to see strong levels of buyer and investor interest in the sector through 2021.