Through the first half of 2024, global M&A activity is tracking 10-15% ahead of 2023 (including +13% in North America) as economic conditions have stabilized and improved. Key tenets of this year’s M&A activity:
- Elevated activity from private equity, who continue to hold record levels of dry powder and are adjusting to the current interest rate environment
- Higher levels of corporate carveouts as large firms look to simplify their business mix or reduce debt
- Overall global EBITDA valuation multiples remain unchanged from a year ago at 9.5x
- Tighter credit spreads have reduced borrowing costs, and expectations for rate reductions in the US and abroad in later 2024 reinforce M&A interest
Our Takeaways
Market conditions continue to support strong M&A activity. At the macro level, we’ve managed to significantly improve inflation over the last 12-18 months while maintaining stable growth and low unemployment. With increased confidence that the market will avoid a recession, we expect private equity to continue to put their record levels of dry powder to work, despite elevated borrowing costs. Valuation multiples have held up well, and we have seen increased focus on deal structuring solutions to retain upside value potential to sellers and de-risk buyers.
Data source: Pitchbook
About Wall & Main
Wall & Main provides corporate development expertise to middle market and large organizations with outsourced corporate development and private M&A advisory services. Learn more at wallandmainadvisors.com.