Key Insights From M&A Rankings

Global #M&A dealmaking hit a 20-year low in April, with only 2,330 deals signed — a 34% drop from the historical average, as tariff uncertainties and #recession fears reshaped the #deal landscape (Reuters). Yet amid the broader pullback, AI-driven developer tools are emerging as a key growth area: - This month, OpenAI’s $3B acquisition of Windsurf underscores how major players are consolidating to gain a foothold in #AI development infrastructure. - PitchBook Q1 2025 #Global M&A Report reveals that technology accounted for nearly 40% of U.S. deal value, driven by large AI and cybersecurity transactions, including Alphabet Inc.’s $32B acquisition of Wiz and the $33B merger of X and xAI. 💼 Strategic Insights: - Tariff-induced volatility is reshaping M&A timelines and valuations. PitchBook's heatmap reveals notable sector disparities, with #technology and financial services showing strong momentum, while sectors like construction and metals see significant declines. - #AI development tools represent a strategic asset class, as #investors seek scalable, tech-enabled solutions to drive #operational efficiencies and mitigate #supplychain risks. - #Healthcare and B2C sectors face valuation resets, with B2C multiples declining to 8.1x EV/EBITDA, the lowest since 2020. 🌱 In a fragmented deal landscape, the #strategic play is clear: - Leverage #AI and #developertools to drive scale and operational resilience. - Optimize #capital structures and focus on value-accretive #acquisitions, particularly in sectors where multiples remain below historical averages. - #Diversify geographically to capture emerging market growth, with tech and AI continuing to attract substantial capital despite macroeconomic headwinds. 📊 Featured Chart: https://lnkd.in/g6m4MXMg #MergersAndAcquisitions #Strategy #Leadership #PrivateEquity #TechM&A #AI #DeveloperTools #EmergingMarkets

I just released a new, data-rich, 12-page report on accounting firm acquisitions. Includes valuation ranges, emerging niches and deal structure examples. It covers and explains in simple terms the topics that matter most to acquirers right now. After months of research (and crunching the numbers behind the $1-5M revenue segment), here are 3 key takeaways that I'll be diving into: 1. Strategic buyer domination - They accounted for 67.1% of deals in 2024, driven by CPA-majority ownership regulations. But private equity is on the rise, enticed by stable, recurring revenues. 2. Advisory Services are diversifying - More deals now involve non-CPA acquisitions (like MSPs) as firms diversify into tech consulting and monthly recurring revenue models. 3. Seller pressures - Aging partners, talent shortages, and increasing compliance demands are driving smaller firms to merge. Here's a snapshot at what's inside the full 12-page report: • Market Overview for 2025 • Valuations • Deal Structures • Down Payments & Earn-outs • Seller Financing • Due Diligence • Post-Closing Success/Failure Factors • Recommendations for Acquirers • Links to 30+ data-rich resources If you’re mapping out an M&A strategy, thinking of buying or selling a firm—or want an inside look at valuations, structures, and beyond—this new report is for you. Drop ‘𝗥𝗘𝗣𝗢𝗥𝗧’ in the comments if you want the full PDF—I’ll send it your way right after. --- Update: Here is the full report: https://lnkd.in/gB7kMXvU

Excited to introduce our new EY M&A Activity Report to capture dealmaking insights from 2023 and provide an outlook of what CEOs can expect in 2024.    M&A was off to a slow start in 2023, however, there are increasing signs of life, especially for larger dealmaking. US deal value this year has slightly surpassed 2022 year-over-year – $1.38 trillion of deals valued at $100 million-plus in 2023, compared to $1.37 trillion in 2022 (as of Nov. 30) – despite deal volume overall being down. Looking ahead, M&A activity in 2024 will be driven by the need for companies to show growth, address the desire for customers to add generative AI and other technologies, and access markets they need to serve existing customers and attract new ones.    Technology, our inaugural EY M&A Sector of the Year 2023, had a transformative year. Though it still lags pre-pandemic levels, #technology M&A activity spiked in Q3 and is trending positive in Q4. Company leaders are being more discerning as they adjust to a higher-for-longer interest rate environment, but they’re looking beyond short-term headwinds and continuing to invest in #AI capabilities and other technologies which helped drive tech stocks to outperform the S&P 500 by 10% since the start of 2022. In addition to #AI, the sector saw a boost in activity from #privateequity firms increasing investment, and companies prioritizing #cybersecurity.   Energy, our inaugural EY M&A Sector to Watch 2024, is widely anticipated to have a blockbuster year in 2024, driven by #decarbonization and #consolidation. The #energy sector is already off to a strong start in 2023, with more than $332 billion in transactions valued at $100+ million announced by US energy companies through Nov. 30, significantly eclipsing the 2022 figure in the energy sector. Activity to watch in 2024 includes investments in alternative and renewable energy, utilities divesting non-core assets, and joint ventures and collaboration on mining and metals projects.   Life sciences M&A in 2023 also rebounded to pre-pandemic M&A levels, which we expect to continue in 2024. It was the second most targeted sector this year through November in terms of deal volume, with recorded deals valued at $219.5 billion. As we look to 2024, M&A drivers include divestments, more bolt-on transactions, and private equity interest in the sector.    For more on EY M&A Sector of the Year and EY M&A Sector to Watch, the catalysts and headwinds impacting deal activity in 2023 and 2024, and what CEOs need to keep in mind for their 2024 investment strategies, see our M&A Activity Report.

Hot off the press! We just released the annual Bain & Company M&A Report. Highlights include: 👉 M&A is cyclically low, by all measures (deal count, deal value, M&A as a % of global GDP). Deal value is up 13% since 2023, but below historical averages and certainly well below 2021 exuberance (which was an anomaly). It remains a challenging climate for M&A 👉 We anticipate that further easing of interest rates is possible, but overall levels are likely to remain relatively high. With greater macroeconomic and geopolitical uncertainty policy makers struggle to balance inflationary pressures and economic growth. 👉 The continued gap in valuation expectations keeps buyers and seller from reaching terms (46% of sellers are waiting for more favorable deal valuations, 43% of buyers are waiting for more attractive assets) 👉 Those deals that do occur face costly,  prolonged regulatory scrutiny (an average of 3 months to close without regulatory scrutiny vs an average of 10 months when scrutinized). Thus dealmakers are prioritizing deals with less likelihood of regulatory review (regulatory due diligence is key!) and proactively engaging with regulators and counterparties to address concerns early. But in many geos, regulators have signaled a shift toward a return to traditional merger enforcement and more timely processes. That's a good sign. ✅ Despite those headwinds, buying remains a faster and cheaper way to build new products and services in response to disruptive technology. 🌍 And M&A, divestiture, and JVs must be part of every company’s strategic response to post-globalization factors: trade barriers, domestic industrial policies, immigration/workforce challenges, data privacy / data management policies, restrictions on technological transfer, and review of FDI. My modest contrinution was to write the payments chapter -- more on that aspect later in the week. In the meantime, kudos to the Bain Global M&A and Divestitures practice team that developed the report, with special direction from Les Baird, partner; David Harding, advisory partner; Dale Stafford, partner; Kai Grass, partner; Suzanne Kumar, practice executive vice president; Rebecca Levinsky Telzak, senior manager; and an editorial team led by David Diamond. Bain & Co 2025 M&A Report: https://lnkd.in/gG8kHynN

The latest KPMG US 2025 M&A Deal Market Study shows a market in transition. While 90% of corporates are evaluating more deals than a year ago, driven by record dry powder and the need to exit long-held assets, the outlook is not without challenges. Key shifts shaping M&A strategies this year: - Interest rates remain a wildcard: While many expected cuts, updated forecasts now suggest rates may hold steady longer than anticipated, impacting financing decisions. - AI adoption in M&A is accelerating: 77% of dealmakers are integrating GenAI into their deal processes, up from 53% last year, aiming for faster diligence and deeper insights. - Corporate M&A remains selective: Many companies are focusing on strategic divestitures, selling slow-growth or non-core assets to sharpen their portfolios. The fundamentals for dealmaking remain strong, but the pace and nature of transactions are evolving. Dealmakers will need to balance capital deployment with greater discipline in valuation, diligence, and risk management. Read the full report: https://lnkd.in/g7duJNet #MergersAndAcquisitions #PrivateEquity #CorporateStrategy #KPMGDealAdvisory