Q3 2024 Takeaways:
Markets gaining confidence
- The equity markets alongside the Persient Middle Market M&A Index built on their momentum in Q2 2024, with the Persient Middle Market M&A Index reaching the highest point since early 2023. Equity markets continue to flirt with all-time highs.
- Deal volume and value rose over 5% compared to Q3 2023, with each quarter in 2024 posting year-over-year growth, reflecting renewed confidence in the M&A market.
- LTM data suggests valuations are stabilizing and on the rise for high quality businesses as buyers and sellers work towards bridging a valuation gap.
Navigating uneven footing
- The Fed’s recent 50 basis point rate cut, along with lowered inflation readings, brings renewed optimism that the oft-mentioned “soft landing” has possibly arrived, though the macroeconomic outlook for the next 6 to 12 months remains mixed.
- With the recent rate cut and the potential for further cuts as soon as November, this could signal buyers to step off the sidelines, benefiting from lower borrowing costs and ample dry powder in reserve.
- Tensions across seas continue to remain top of mind, as the conflict in Ukraine and the Middle East continues to escalate.
Looking forward to Q4 (and beyond)
- With US elections fast approaching, M&A optimism continues to climb despite a toss-up presidential election.
- While economic policy is top of mind with executives, regardless of the administration, remaining competitive in the marketplace is key. A recent PwC survey of executives showed that under either administration, at least 78% of executives expect to either maintain or increase their current levels of investments in the areas surveyed, such as AI and sustainability.
- The US presidential election may be the headline grabber, but according to the same PwC survey, state governments, federal regulatory agencies, local governments, and Congress were all ranked higher than the President by executives for their impact on business.
