Mergers and acquisitions are up 12% year-over-year in mid-2024, presenting a picture of robust recovery and cautious optimism.
As we cross the midpoint of 2024, the mergers and acquisitions (M&A) landscape presents a picture of robust recovery and cautious optimism. Various sources estimate the first half of the year witnessed a 12% year-over-year increase in both deal count and dollar terms, signaling a strong rebound from previous years' slowdowns. With an estimated $375 billion in deal value across more than 4,000 deals, the market is experiencing its best performance since the 2022 downturn.
A look back at the first half of 2024
The M&A resurgence is attributed to several factors. The leveraged finance market's reopening has stabilized platform leveraged buyout deals, which were previously constrained by reduced access to debt and higher borrowing costs. Moreover, the deal value and count in 2024 are significantly above the "old normal" quarterly levels of 2017 to 2019 by approximately 25% to 45%, respectively.
M&A projections for the rest of 2024 and 2025
Looking ahead, the M&A activity is not expected to skyrocket but is projected to pick up pace. The small number of transactions in 2023 sets a low base, making year-over-year comparisons in 2024 easy to surpass.
The anticipation of lower interest rates could catalyze a resurgence in overall deal activity, potentially leading to a "crowding-out" phenomenon that may dilute the proportion of add-on transactions in the mix.
Reasons for optimism
Firms have several reasons to be optimistic about the next 12 months. The resilience of the U.S. and other economies in the face of rising rates has been remarkable, defying the anticipated recession. This economic stability bodes well for M&A activity and the advisory services supporting it.
The transaction advisory landscape is evolving with integrated strategies helping clients manage risk, drive business performance, and achieve long-term goals of turning risk and compliance activities into opportunities to drive sustainable business value. Additionally, many aging private industry owners seek to retire or sell their businesses.
This trend is expected to continue, with private equity providing much of the capital to fund transitions and owning a larger share of privately held businesses.
How CLA can help with M&A transactions
The M&A market in 2024 has shown signs of vitality and resilience, with projections for the rest of the year and into 2025 indicating a steady climb. CLA is well-positioned to help private equity capitalize on this growth, supported by service trends aligning with the market's needs. As we move forward, the M&A landscape is poised for an exciting phase of transformation and opportunity.
CLA's M&A deals through mid-year 2024
See how many M&A deals CLA's transaction advisory team has conducted through mid-year 2024 and the many related services we provide.
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