Mid-Market M&A Activity Extends Its Rebound
Deal volume among mid-sized companies has climbed for a fourth consecutive quarter as financing conditions ease and valuations stabilise.
Priya Ramanathan
Business Features Writer
Merger and acquisition activity among mid-sized companies extended its rebound this quarter, marking a fourth consecutive period of rising deal volume after a sharp slowdown in prior years driven by higher borrowing costs and valuation uncertainty.
Advisers point to easing financing conditions as a key factor: as borrowing costs have moderated, leveraged buyouts have become more economically attractive, encouraging private equity firms and strategic acquirers to move ahead with deals that had been shelved.
Private equity firms in particular are facing growing pressure to deploy record levels of committed but unspent capital, often referred to as 'dry powder', which has built up over several years of more cautious dealmaking. That pressure is expected to support continued deal activity even if broader financing conditions don't ease much further.
Sector-wise, technology, healthcare and business services have accounted for a disproportionate share of activity, reflecting continued investor appetite for recurring-revenue business models over more cyclical industries.