IMAP partners closed 162 M&A deals worth more than $21 billion during the Q1-Q3 2022 period. Challenging macroeconomic conditions, including high and persistent inflation and the threat of recession have dominated financial headlines throughout the year. However, the mid-market M&A scene is still holding up in spite of significant stock market declines, with no sign of the major slowdown in deal activity predicted by many just a few months ago. At the same time, there has been a clear transition towards more cautious financing, circumspect investor approaches, and demand for high quality assets, with a particular strategic emphasis on companies with sustainable growth models that should perform well in an economic slowdown. Another aspect of these shifted market dynamics is that financially sound strategic buyers are well positioned to pursue buy-and-build transactions that strengthen their position. Financial players and PE groups may have a tougher time moving forward on deals because of the decreased availability of cheap leveraged financing.

Technology, Industrials, Business Services, and Healthcare were the most active sectors for IMAP in Q1-Q3, accounting for nearly 50% of total deal volume. Significant IMAP deal activity was also registered in the Consumer & Retail, Food & Beverage, and Transportation and Logistics sectors. Going forward, IMAP dealmakers have signaled that these are the sectors likely to account for the bulk of growth in the M&A mid-market. Roughly 24% of IMAP’s transactions so far this year were cross-border, which is a little lower than previous periods and probably reflects growing investor uncertainty surrounding the international environment. However, the relative decline of major currencies versus the US dollar may encourage international buyers to pursue inbound transactions in foreign markets.

Oct 28, 2022

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