At the start of this year, M&A experts predicted a brighter outlook for 2025 than last year due to market conditions improving, anticipated interest rate cuts, and post-election stability.  

However, the Wall Street Journal’s recent article suggests a more cautiously optimistic approach now: “The deals market just ended its quietest January in a decade.” According to the article, CEOs and dealmakers are starting to feel more uncertain about President Trump’s second term as looming trade war threats negatively impact consumer confidence and increase inflation projections. 

Some business owners reportedly feel a sense of whiplash from the administration’s erratic tariff policies, specifically the announcement and subsequent delay of steep tariffs on Canadian and Mexican imports. “A number of executives, as well as top investment bankers and other industry advisers, have said that priorities have shifted in recent days to navigating tariffs and other policy issues,” the Wall Street Journal reported. 

Tailwinds  

Despite the current headwinds, there are still reasons to be optimistic about M&A activity in 2025. 

• Private Equity Dry Powder: The record amount of dry powder – or unallocated capital – that private equity firms have on hand should drive more dealmaking activity. According to Global Finance, “current estimates place this untapped capital at around $2 trillion.” The need to deploy this capital incentivizes PE firms to identify acquisition targets proactively. High-quality businesses can still put themselves in a favorable position regardless of market conditions.  

• Strong Buyer Interest: With so much capital ready to be invested, businesses are lining up to make attractive deals. Sellers of high-quality businesses can anticipate multiple offers by partnering with an M&A advisory firm. By fostering a competitive auction environment, advisors enhance the quality and quantity of potential offers, as buyers know they’re competing. 

• Expected Increase in Valuation Multiples: Many experts still predict higher business valuation multiples. Business owners and leaders who develop intentional, strategic exit plans will be well-positioned to capitalize on these unique market dynamics. 

Looking Forward with ACT Capital Advisors 

Bob Hild, ACT Capital Advisors’ Chairman & CEO, sums it up nicely: “The business environment may be challenging, but we remain optimistic about future growth. Continued dedication to business development is crucial—today’s efforts build tomorrow’s successes.” 

If you are considering selling in the near future, now is the time. Don’t miss this crucial window. Start the conversation with ACT Capital Advisors today and position yourself advantageously in today’s market.  

About ACT Capital Advisors
ACT Capital Advisors is a trusted mergers & acquisitions firm serving lower to middle-market companies across diverse industries. With a 40-year legacy of successful transactions, ACT has facilitated over 250 deals, unlocking more than $2.5 billion in value for our clients. For more information, visit https://actcapitaladvisors.com/.