March 2024 — By John Mathis
As Q1 wraps, we are taking stock of the M&A market and have observed 3 key themes:
1. Our clients are active – with a notable uptick in buy-side engagements. We’ve launched initiatives for add-ons and platforms in the Industrial Services, Business Services and Financial Services markets including:
2. PE buyers are intense – “We cannot have another year like last year” stated a PE contact recently - capturing the stress caused by the slowdown in M&A from a year ago. Notably, our sell-side teams are seeing strong market response including some preemptive efforts. Our active sell-side engagements in Industrial, Business and Financial Services include:
3. We expect gradual improvements in M&A activity – In their market intelligence webcast last week, S&P highlighted an uptick in deal value in Q1, although there were fewer transactions. Tech is likely to be the most active arena. However, any return of M&A volumes will be led by Financial Sponsors returning to the deal table. The small number of PE portfolio company exits highlights how this M&A market is stalled and needs a catalyst to restart the M&A cycle. The IPO market is often a leading indicator – Reddit’s debut and 30% rise in first day trading was respectable. We’ll see how the next group of larger IPOs fare – we’ll be watching Plaid (~$14B), Discord (~$15B) and Chime (~$25B).
Let’s talk about what we are seeing and hearing in the market.
