After a slower year for deal activity in 2023, mergers and acquisitions rebounded globally in the first quarter of 2024. According to S&P Global Market Intelligence, “the first quarter of the year finished with ten $10 billion-plus M&A deals worldwide, the highest total since the second quarter of 2022.”
The targets of each of those $10 billion-plus transactions this quarter have been US-based. A recent Reuters article also reported on Q1 2024, citing Dealogic data that “Total M&A volumes climbed 30% to about $755.1 billion.”
The resurgence of M&A megadeals in the first quarter should inspire optimism and drive management teams to pursue deals. The rebound of both the technology and industrial sectors signal a favorable environment for business owners looking to exit.
However, the Bureau of Labor Statistics’ new data on Wednesday showed that prices rose 3.5 percent from March 2023 to March 2024 – and CPI for all items rose 0.4% in March. The Federal Reserve is now unlikely to decrease interest rates until later this year, which only increases uncertainty in an already uneasy market – particularly with the U.S. presidential election just around the corner.
“Despite these headwinds we’re currently facing, there’s still a tremendous amount of capital desperately searching for high-quality companies,” says ACT Capital Advisors’ CEO & Chairman, Robert Hild. “We’re not seeing a decline in valuations for lower middle market companies, and we’re working with buyers who are paying multiples that haven’t changed, in spite of the higher rate environment.”
Plus, private equity firms still hold $3.7 trillion in dry powder reserves that they’re looking to deploy into acquiring high-quality companies. PE firms are poised and ready to capitalize on strategic opportunities in the lower middle market.
About ACT Capital Advisors
ACT Capital Advisors is a global Mergers & Acquisitions (M&A) firm representing lower to middle-market companies across all industries. ACT has a 40-year history of deal-making, closing 250+ transactions, and unlocking over $2.5 billion in wealth for its clients. To learn more, visit www.actcapitaladvisors.com.
