Middle-Market Dealmakers Prepare for a Rebound

Jan 10, 2024

Middle Market Growth Special Issue
Title: “Middle-Market Dealmakers Prepare for a Rebound”
By: Britt Erica Tunic

M&A experts are hopeful that 2024 will be a more fruitful dealmaking year, as seller valuation expectations begin to come down

When New York City’s famed crystal ball dropped in Times Square on New Year’s Eve, millions of people watched as it heralded the start of 2024 and the blank slate of a new year. But long

before the ball fell, experts within the M&A industry were looking into their own proverbial crystal balls to predict what the mergers and acquisitions landscape will look like in the year ahead. There are some significant differences in what dealmakers anticipate for 2024, yet a common expectation shared by all is that it will be a year of change—and largely for the better.

According to the results of a survey of the ACG community, 55% of respondents expect an increase in deal activity in 2024, 27% expect activity will remain much the same as 2023, and only 18% anticipate a decline.  Following a year and a half of paltry M&A activity, due primarily to high interest rates, inflation, fears of a recession and a major disconnect between buyers and sellers regarding portfolio company valuations, there are widespread expectations that the floodgates will finally begin to open in 2024.

“We’re not in the business of sitting on the sidelines. We’ve remained extremely active over the past two years, having closed on three platforms and multiple add-ons. We’re in the business of buying and selling companies and doing deals, and I expect 2024 will be a good year,” says Tad Nedeau, a co-managing partner at PE firm Lincolnshire Management and head of the firm’s origination team. In fact, he says it would not be surprising to see a similar deal trajectory to what occurred after the 2008 credit crisis. “We saw this in ’08’-09, where in the following years, deal volume picked up. And I think we’re going to see that here again,” says Nedeau.

Article found on p. 11-18: https://middlemarketgrowth.org/middle-market-growth-2024-multiples-report-special-edition/

Middle-Market Dealmakers Prepare for a Rebound (PDF)