Optimism Surrounding Mergers and Acquisitions Reaches Four-Year High
The latest annual mergers-and-acquisitions survey unveils an unprecedented level of optimism for future deals among middle-market companies and private equity firms. According to the Citizens M&A Outlook survey, a remarkable 46% of mid-market firms are anticipating a robust M&A market in 2024, reaching the highest level since 2020.
The survey also highlights the increasing confidence of private-equity firms in the middle market, with 52% indicating that the current M&A market is strong. This figure marks a significant increase from 38% recorded last year. Citizens Financial Group Inc., the backer of this survey, provided valuable insights into these trends.
Jason Wallace, the head of Citizens M&A Advisory, expressed his belief that the M&A environment is gradually returning to normalcy. He referenced a "more-positive economic backdrop" as a contributing factor. With interest-rate cuts on the horizon and a growing sentiment that the U.S. will avoid a recession, dealmakers are becoming more optimistic.
As economic uncertainty recedes, experts anticipate a surge in transaction activity. In fact, 46% of middle-market companies surveyed expect the U.S. economy to improve in the present year. Additionally, the forthcoming U.S. elections in November could further fuel M&A interest throughout the first half of the year, as noted by the survey. Furthermore, the inclusion of artificial intelligence and international prospects are augmenting the overall interest in dealmaking.
The survey collected data from 277 middle-market businesses with revenue ranging from $50 million to $1 billion, as well as 123 private-equity firms with funds up to $1.5 billion. All respondents held senior-level positions directly involved in decision-making. The survey gathered this information between November and December.
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