In the time between the start of the pandemic in March 2020 until somewhere around, say, fall of the same year, there was a change in semantics. Back in March, there was a lot of talk of troubled assets — companies that struggled so much their valuations dropped because of it. There was a sense of, as some put it, blood in the water, that there would be a rush on value and prices would drop, leading to significant opportunity to buy companies at a big discount. But that conversation has changed. Now much of the talk is about the rush to quality.

Sara Clevenger, a principal at the middle-market M&A advisory firm Blue River, says there are some opportunities where organizations have had some challenges last year that could represent an opportunity for investors that specialize in turnaround — essentially a conversation for a specialized group of investors looking for a particular product.

The majority of the transactions that she’s dealt with, and the majority of the buyers that she’s dealing with, the perception that valuations would drop, essentially across the board, has all but evaporated.

“Because of the dynamic of the accelerated demand, to the extent that organizations can show that they’ve righted the path and that they’re on their path to prosperity in 2021, valuations have actually stayed very strong,” Clevenger says. “Buyers have had to recognize that it takes two to tango and sellers aren’t necessarily going to sign up for that.”

Sellers, she say, understand that they’re not without leverage. They know where the market is in terms of the supply-demand dynamic and that buyers are eager to transact.

“A lot of the conversations that I’ve had with sellers, they’ve held pretty strong,” she says. “To move the needle for them, they’re not going to jump ship at a time when it’s going to be a negative impact on what they could achieve.”

In a wide-ranging conversation on the Smart Business Dealmakers Podcast, Clevenger looks back at M&A’s interesting 2020, and looks ahead, discussing what changes in perceptions and approaches could color 2021.