Middle Market M&A Outperforms Broader
Market Despite Global Deal Flow Decline
BOSTON, Jan. 30,
2024 /PRNewswire/ -- Capstone Partners, a leading
middle market investment banking firm, in conjunction with its
partner IMAP, a leading global investment banking advisory firm,
released its annual Trends in Global M&A Survey Report, with
insights from M&A advisors across the world. This
report combines Capstone's in-depth investment banking knowledge
with proprietary data obtained from 100 participating IMAP M&A
advisors across 65 countries. Conducted between September 26, 2023, and October 24, 2023, the survey captures sentiment
at a pivotal moment in global middle market M&A, providing
insight into M&A market activity throughout 2023 and forecasts
for deal making conditions in 2024.
Key Findings:
- Despite a decline in overall M&A volume, middle market deal
activity continued to outperform the broader market in 2023, as
identified by 57% of total investment bankers surveyed.
- As M&A activity likely neared or reached its trough in
2023, the majority (51%) of total advisors surveyed anticipate 2024
deal flow to increase. However, the lion's share (47%) of those
respondents expect a moderate increase in 2024, indicating that a
full M&A volume rebound may not materialize over the next 12
months.
- Financial criteria comprised the top three most important
M&A target characteristics for acquirers in 2023, as noted by
total advisers surveyed. This includes strong margin profiles (71%
of advisors), recurring revenue (63%), and defensible cashflow
(47%).
- More than 90% of advisors in each industry forecasted an
increase or consistent amount of private equity activity in their
respective industries, illustrating the strength of the sponsor
community across a variety of markets.
- M&A purchase multiples are expected to remain compressed in
2024, with 67% of advisors surveyed anticipating little to no
change in valuations compared to 2023, likely driven by
market/economic uncertainty and a lack of motivated acquirers.
- Half of advisors projected businesses owner retirement to
continue to be the driving force behind sell-side mandates in 2024,
followed by an owner seeking liquidity.
- To achieve a successful M&A deal for a seller, nearly all
(95%) advisors pointed to setting a realistic deal valuation as
very or somewhat important. This aligns with the primary deal
closing hinderance advisors faced throughout 2023, as 58%
experienced excessive valuation expectations from sellers.
Through this research, Capstone Partners and IMAP have tracked
notable impacts on the global M&A market, current economic
environment, as well as M&A advisors' expectations on pricing
trends and regional risks and opportunities moving forward into
2024. The report also provides an analysis of
sell-side M&A considerations for middle market business
owners looking to pursue a liquidity event.
To access the full report including a breakout of the results by
industry and region, click here.
ABOUT CAPSTONE PARTNERS
For over 20 years, the firm has been a trusted advisor to
leading middle market companies, offering a fully integrated range
of investment banking and financial advisory services uniquely
tailored to help owners, investors, and creditors through each
stage of the company's lifecycle. Capstone's services include
M&A advisory, debt and equity placement, corporate
restructuring, special situations, valuation and fairness opinions
and financial advisory services. Headquartered in
Boston, the firm has 175+
professionals in multiple offices across the U.S. With 12 dedicated
industry groups, Capstone delivers sector-specific expertise
through large, cross-functional teams. Capstone is a
subsidiary of Huntington Bancshares Incorporated
(NASDAQ:HBAN). For more information, visit
www.capstonepartners.com.
ABOUT IMAP
IMAP is an International Mergers and Acquisitions Partnership
with a 50-year track record, more than 450
M&A professionals worldwide and a presence in 41
countries. IMAP has closed over 2,200 transactions valued at
$130bn in the last 10 years and is
consistently ranked in the world's Top 10
M&A advisors (Refinitiv) for mid-market transactions.
For more information, visit www.imap.com.
For More Information Contact:
Sarah Doherty
Capstone
Partners
Director of Market Intelligence
617-619-3310
sdoherty@capstonepartners.com
Claire Smedley
IMAP
Head of Communications & PR
+34 659 231 402
cs@imap.com
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SOURCE Capstone Partners