With 2025 underway, the M&A community is navigating a market defined by tempered optimism, evolving strategies, and a recalibration of expectations. From the deal tables of ACG Atlanta’s M&A South to DealMAX in Las Vegas, we received a vital pulse check on how dealmakers view the year ahead.
As for our experience, we participated in a combined 115+ meetings with private equity firms and M&A service providers. Outlined below are a few of our key conference takeaways:
1. A Cautiously Optimistic Start
The tone across both events was one of measured confidence. Heading into 2025, interest rates had begun to ease, signaling a more favorable cost of capital for private equity firms. Paired with the potential tailwinds coming off an election year, many GPs expressed a positive longer-term view.
This optimism, however, was more recently tempered due to various headwinds including ongoing geopolitical tensions and tariff policy impact. Buyers voiced concerns about market volatility and uncertainty, with many revising their 2025 M&A expectations downward to align with trends from the previous two years.
2. High Volume, Low Conviction
With select exceptions, the firms we spoke with at both M&A South and DealMAX consistently noted that despite a strong January start, Q1 deal flow was down ~10-30%, on average. Furthermore, buyers noted the deals that did hit the market often failed to meet historical quality benchmarks. This anecdote reinforced the theme that buyers are more selective than ever, and premium valuations are reserved for the best-positioned and well-performing assets – high-quality businesses, with consistent earnings, in favorable end markets.
After years of gridlock driven by unrealistic price expectations, the bid-ask spread is finally starting to compress. Sellers are increasingly aligned with current market realities, especially as hold periods stretch and capital calls loom.
The firms we spoke with consistently noted that while premium multiples still exist, they’re typically reserved for businesses with strong margins, recurring revenue, and professionalized operations.
3. Private Equity’s Role is Evolving
Across the board, private equity firms are outsourcing more of their buy-side activity—and not just for add-ons. Increasingly, funds are engaging external partners to help develop their theses, surface platform targets, and evaluate new verticals. This shift reflects the growing complexity of deal origination and a desire to stay agile in a competitive market. By extending their reach through engaging outside advisors, firms are finding new ways to refine their pipelines and move faster on emerging opportunities.
4. Micro Trends are Reshaping Strategy
While election dynamics and rate movements are encouraging dealmakers to stay engaged, tariffs have emerged as a top concern. Several firms noted that the policy volatility tied to international trade is forcing them to re-evaluate supply chain exposures and rethink investment theses. The result? A more cautious, refined approach to sector selection and diligence.
Looking Ahead: Strategy over Speed
M&A in 2025 is shaping up to be a year where success favors those who are prepared, selective, and strategic. Quality will continue to drive valuation premiums, and firms that embrace realistic pricing and smart external partnerships will be best positioned to compete.
Despite an overall tempered start and ongoing macro uncertainty, the groundwork is being laid for a healthier, more balanced market. With narrowing valuation gaps, an improved interest rate environment, and refined private equity strategies, we believe 2025 could mark a turning point—not in explosive volume, but in the return of more dealmaking centered around discipline and high-conviction.
DISCLAIMER This presentation is intended for information and discussion purposes only and does not constitute legal or professional investment advice. Statements of fact and opinions expressed are those of the participants individually and, unless expressly stated to the contrary, are not the opinion or position of Harbor View Advisors, LLC (“HVA”). The information in this presentation was compiled from sources believed to be reliable for informational purposes only. HVA does not endorse or approve, and assumes no responsibility for, the content, accuracy or completeness of the information presented.
