Towards the end of a relatively strong M&A market in 2022, many analysts began predicting that a global economic slowdown and decline in M&A activity were inevitable as the post-COVID rebound faded and conditions for dealmaking became more challenging. Indeed, the start of 2023 was marked by persistently high inflation, rising interest rates and stock market volatility. Moreover, elevated financing costs, cautious lending and diminished company valuations were expected to put a damper on transaction activity. And yet, expectations of a recession, while still very much present, keep getting pushed out in time and the demand for high-quality assets, especially those in the mid-market space has remained surprisingly strong throughout.
In the first half of 2023, IMAP dealmakers closed 104 transactions valued at more than $4.3 billion. Latest data shows that this momentum carried over into the second half and several IMAP partners across the world are hoping to reach new records by the end of 2023. IMAP’s track record in recent quarters reflects a dynamic mid-market environment that is often overshadowed by macro headlines regarding a potential recession and general investor uncertainty. While it is the case that buyers have become more selective compared to recent years, they are still actively looking for targets with resilient and differentiated business models. Looking ahead, there are several positive trends at play in the mid-market that should continue driving transactions, including an aging owner base looking for exits, a continuing move towards market efficiencies and consolidation, and the adoption of new technologies.
Another factor that is propping up activity in the mid-market is the emergence of strategic players and PE investors typically focused on larger deals who are now moving downstream in search of less risky and less complicated deals. The series of progressive interest rate hikes implemented by major central banks around the world starting in 2022 was initially expected to stamp out buyer demand after years of exuberant activity. However, well positioned strategics and especially PE funds that continue to have large amounts of dry powder at their disposal are competing for high-quality assets. About 30% of IMAP transactions in H1 2023 involved either a PE buyer or seller.
As we publish this new edition of the Dealbook, IMAP continues to hold its position as one of the world’s leading global M&A advisories for the mid-market. The following pages showcase IMAP deals closed between Q1 2022 and Q2 2023, representing our collective track record of delivering optimal M&A outcomes for our clients across a breadth of sectors and countries. I am proud of the steady performance and cross-border collaborative efforts displayed by IMAP partners around the world, but must emphasize that our dedication and professionalism is inspired by our clients. The growth stories, visions of the future and desire for success shown by our clients is a constant source of energy.
So, as IMAP celebrates its 50th anniversary in 2023, let us remember that beneath all the numbers, what makes IMAP unique is as pertinent now as it was back in 1973: providing our clients with M&A opportunities on a global scale. And as we look forward, we embrace with confidence our commitment to serving our clients well into the future. Whether it be helping entrepreneurs achieve their dreams or institutional business owners reach their long-term goals, we will strive to ensure our clients continue to thrive in competitive and evolving economies. Without them, we wouldn’t have a Dealbook to publish or client stories to tell.
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