02 Apr M&A Update March 2024
Posted at 15:48h
in Insights
2023 was a year with plenty of challenges for private equity and M&A as a whole:
- PE capital deployed in the US declined by 29.5% on the year and value derived decreased by 26.4%
- PE borrowing rates have remained high and are still near double the levels at which they stood at the start of 2022.
- While not as depressed as exits, buy-side activity has decreased to roughly half of 2021’s peak, with platform deals taking the brunt of the hit. Add-ons and PE growth equity rounds have filled the void, but only partially and dominated by smaller deals.
- The PE end game at present is to grow portfolio companies back up to historical values. With interest rates higher for longer, PE companies need to grow for longer.
- Across the over eleven thousand US companies currently held by PE owners, the median holding period has stretched to 4.2 years and continues to grow.
- Deals have gotten smaller as these types of deals are more easily closed and easier to finance, many coming in the form of add-ons.
Read our full report here: M&A Update March 2024