Nearly two years after reaching its zenith in Q4 2021, the downturn in overall M&A globally shows no signs of slowing and in fact, accelerated in Q3 2023.
Higher interest rates/extended interest rate uncertainty, economic headwinds, and, for some buyers, diminished access to debt pressured the global M&A market in Q3, dragging down quarterly deal value to a decade-low point.
Stats published by Pitchbook in their Q3 Global M&A report make for sober reading:
- Global M&A value fell sequentially by 19.9% in Q3 2023. The $776.8 billion recorded deal value was the lowest quarterly total in nearly 10 years, falling 49.0% below the quarterly peak from nearly two years ago.
- Deal value is down 22.5% YTD despite a negligible decline in deal count (-2.5%), which neatly sums up the current state of play.
- Sponsor share of M&A deal flow has contracted to 33.1% of the total.
- The median EV/EBITDA multiple held steady at 8.7x for the 12 months ended Q3 2023, in line with 8.7x in 2022. While this is below the all-time peak of 10.6x in 2021 and the average of 10.0x between 2017 and 2019.
Dealmakers are focusing on smaller deals until conditions improve for megadeals. BizBuySell’s Insight Report, which focuses on business sales in the lower middle market, tracked a 2% increase in overall deal volume during Q3 and 10% increase in the median sales price compared to Q3 2022.
Look out for a full wrap-up of the 2023 M&A market in January!
Concept and Perspective 