M&A Update August 2023

M&A Update August 2023

2022 was a year with plenty of challenges for private equity and M&A as a whole:

  • The growing valuations of late 2021 were stunted by the fastest-tightening cycle in 40-plus years.
    PE borrowing rates increased to double the levels at which they stood at the start of 2022 and are well into the double digits.
  • The record deal activity we saw in 2021 was due to a variety of factors, including pent-up demand from the decline during the initial stages of the pandemic, as well as stimulus-driven activity from steps taken by the government to mitigate the pandemic’s effects.
  • US PE deal making declined 19.5% for the year from 2021 highs but remained well above the quarterly pace that preceded the pandemic.
  • PE firms were scrambling to find new ways to generate high returns and retain the top spot in asset class performance.
  • Deals have gotten smaller, making them more doable and easier to finance, many coming in the form of add-ons.
  • In the fourth quarter of 2022, total US PE deal count and value declined by 23.4% and 41.8%,respectively, from previous year peaks due to worries about the economy in 2023 and increased interest rates.

Read our full report here: M&A Update August 2023