Skip Navigation or Skip to Content
Mergers & Acquisitions

M&A Deals – Trends and Optimism for 2024

At a Glance

Main Takeaway

The prolonged slowdown in Mergers & Acquisitions (M&A) activity after the 2021 and early 2022 frenzy has led to a period of relative stagnation and uncertainty due to increases in interest rates, fears of a recession, and a volatile geopolitical environment.

Despite these challenges, the M&A market for 2024 is showing signs of promise. New technologies in burgeoning fields driven by digital assets, artificial intelligence (AI), and the ever-evolving Fintech space are seeing rising investor confidence, creating more opportunities for M&A activity, and offering investors more latitude to buy or sell their equity stakes.

Next Step

While challenges hindering M&A activity remain, analysts predict the number of M&A deals in 2024 is on the up-swing, and projections are optimistic. Learn about the latest insights affecting M&A markets and how Windes’ mergers and acquisitions strategy services can assist your business in making the most of your capital during this new period of growth.


Rising Optimism in 2024

With better performance in 2023, increased confidence in the M&A market is expected to continue in 2024. Several key trends are fueling M&A optimism. From resurgent corporate activity to strategic cross-border deals, here is why experts are optimistic about the year ahead:

Resurgent Corporate Activity

Strong balance sheets, improving financing markets, and increased CEO confidence indicate increased corporate acquisition activity. Energy, technology, and healthcare are expected to see notable deals. Long-term trends like AI, ESG, and infrastructure spending could further impact activity across industries.

Return of Financial Sponsors

Private equity (PE) firms hold record amounts of “dry powder” for investments. Aging private equity holdings need to be monetized, potentially leading to more exits and minority stake sales. Easier lending in 2024 could further accelerate sponsor activity.

Activist Investor Influence

The performance gap between strong and struggling companies creates opportunities for activist campaigns pushing for M&A activity. As financing markets improve, we may see an increase in “take-private” proposals.

Corporate Separations Driving Clarity

Spinning off non-core businesses remains a popular strategy for streamlining operations and unlocking shareholder value. This trend is expected to continue, creating potential acquisition opportunities.

Cross-Border M&A Driven by Regional Disparities

Economic differences between regions could fuel cross-border deals. European companies may seek US acquisitions, while Japanese firms could invest abroad for higher yields.


Supporting Survey Results

A recent Citizens Financial Group Survey found the following results when interviewing business executives directly involved in M&A decision-making:

  • Mid-market firm optimism is at its highest since 2020, with 46% expecting a strong M&A market in 2024.
  • PE firms show even greater positivity, with 52% seeing strength in the current M&A market, a notable increase from 38% last year.
  • Almost half (46%) of PE firms anticipate higher deal volumes in 2024, while only 19% expect a decrease.
  • Economic forecasts are more optimistic, with 46% of mid-market companies and 50% of PE firms expecting US economic conditions to improve in 2024. Among those expecting an improving economy, 68% are likely to engage in M&A activity.
  • Improved economic conditions are anticipated to bring more capital to the market, with 79% of PE firms expecting to buy more in 2024.
  • The pool of potential buyers among mid-market firms expanded for the second consecutive year.


Advice for CEOs Interested in M&A Deals

When navigating the M&A market in 2024, you must adapt your strategy to maximize opportunities for deals for further profitability. Here are considerations for profitable M&A deals in the upcoming year:

Look beyond the familiar

Seek opportunities in areas or markets slightly outside your usual operations. This approach can lead to more long-term benefits compared to sticking strictly to core products or regions. For instance, if your business specializes in software development, consider exploring related fields like data analytics or cybersecurity, capitalizing on your expertise while venturing into new, lucrative technologies.

Consider varied transaction models

When considering M&A strategies, explore various transaction models beyond the simple 100% acquisition. Options like acquiring minority interests, forming joint ventures, creating strategic alliances, or initiating corporate ventures can provide unique strategic advantages and less capital. These approaches offer flexibility, allowing you to leverage synergies, share risks, and access new markets or technologies without committing to full ownership.

Opt for cash-based acquisitions as a strategy

While pursuing M&A deals, prioritizing cash transactions can add intrinsic value to the target. Doing so can align with the deal’s true value by avoiding the offer of stock for the deal. This approach promotes precise and disciplined valuations, ensuring you invest wisely in a competitive M&A landscape. You can improve your negotiation position and simplify the acquisition process by opting for cash. This strategic move allows you to make more informed and assertive investment choices, driving successful M&A outcomes.


Develop a Profitable M&A Strategy for Your Business

The M&A market is making a comeback, opening up new opportunities for you to grow, sell, or acquire new business structures. The M&A team at Windes can guide you throughout the M&A process, from due diligence procedures to financial modeling and EBITDA analysis pre and post-acquisition.

Take advantage of this current positivity and explore your M&A options with Windes. Contact us today to speak with our team of experts about your goals to get started.
Payments OnlineTaxCaddy
Secure File TransferWindes Portal