Mergers & Acquisitions Despite expectations for a strong 2025, new deal activity in mergers and acquisitions (M&A) has been slower than anticipated due to economic, geopolitical and regulatory uncertainties, along with long-term interest rate volatility. However, significant capital remains available, suggesting a potential surge in deal activity, though the timing is uncertain. Financial Buyers Landscape Private equity firms and investor groups typically lead the charge in terms of new deal activity, however market volatility and economic uncertainty has curved financial buyers’ appetites to bring on new assets in into the portfolio in Q1 2025 and, instead, focus on improving their existing portfolio. Valuations have dropped about 20% since their peak in 2021, with valuation volatility from 2022 to 2024. Pitchbook reported that while EV/EBITDA multiples increased in 2024, EV/Revenue multiples decreased. EV/ Revenue multiples are largely indicative of corporate/strategic deals vs. financial deals. Despite this, 2024 was a strong year for private equity deal count, although the volume of deals, especially in the lower-mid and middle-markets, decreased by about 18% year-over-year.
4,505
3,655
3,316 (estimated)
Private Equity Middle Market Deal Activity 2021-2024 Source: Pitchbook 2024 Annual US PE Middle Market Report
3,088
$518.4B
$379.1B
$320.5B
$374.1B
2021
2022
2023
2024
Deal Value
Deal Count
While new platform activity has slowed a bit, add-on activity has continued to persist as companies look to supplement organic growth with acquisition growth.
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