IMAP closed 47 M&A transactions valued at over $2 billion in the first quarter of 2023. While the figure was down from previous quarters it was not as low as initially expected. At the macro level, interest rate hikes, persistently high inflation, financial market instability, and fears of a recession put a damper on dealmaking activity. At the transaction level, IMAP dealmakers have reported that buyers are placing increasing scrutiny on target business models and projections. Furthermore, with bank financing more expensive and difficult to obtain compared to the exuberance seen in recent years, valuation levels for some targets at least, have dampened. Nevertheless, high quality businesses with strong margins and defensive growth profiles continue to attract interest from well positioned strategic buyers and financial buyers alike as equity funds remain keen to deploy their vast capital resources.
Business Services, Industrials, Consumer & Retail, and Building Products & Services were the most active sectors, accounting for 60% of total IMAP deal volume. Approximately 32% of the transactions were cross-border, which is consistent with previous quarters and reflects IMAP’s global nature. The bulk of IMAP’s Q1 deals involved a target company in either Europe or North America, with deal flow slightly more limited in Asia and Latin America.
Click below to read the full Q1 Review, including IMAP Partner Local M&A Insights.
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