Webinar Key Takeaways: Current U.S. Middle-Market M&A Market Update

Foley recently hosted a webinar where Craig Roush and Jonathan Witt broke down the current U.S. Middle-Market M&A ($25 million – $250 million) trends through the third quarter of 2023.

Much has been said about the return of M&A in 2023, and while there are deals happening, it is not the boom that many expected – but there remain promising signs heading into 2024. Additionally, in this changing climate, aspects of middle-market M&A that were once uncommon have begun to standardize and vice versa. Here are some of the key takeaways from the discussion:

Deal volume is down almost 10% YTD 2023 vs. 2022, and both volume and pricing have been in a downward trend off the peak of 2021 as parties face interest rate- and financing-driven headwinds.
Despite the downward trend, M&A activity is still above the pre-pandemic levels of 2019, and a backlog of transactions is building that suggests M&A will be resilient heading into 2024. Buyers have record levels of dry powder, and private equity firms, strategic sellers, and family owners all have reasons to look for exits.
The economic picture may also be brightening as we head into 2024 – inflation appears to be cooling, interest rates may be peaking, and the long-term macroenvironment appears stable.
In the near term, credit markets continue to see challenges, with deal financing coming at higher prices and sometimes making up a small portion of the debt/equity mix.
IPO markets, de-SPAC markets, and foreign investment in U.S. companies are all currently down, while increased buyer and government scrutiny has created additional near-term pressures.
Representation and warranty insurance have become standard. The short-term decline in M&A activity has led to more advantageous policy terms and pricing for buyers as insurers look to fill excess capacity.

If you were unable to join us for this webinar, we encourage you to view the recording. If you have any questions relating to the topics covered, please contact or .

Disclaimer

This blog is made available by ��; Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of ��; Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.