Middle-market dealflow took a step back in May, declining by about 25 percent from April, according to data supplied by LSEG. But there is still optimism based on M&A growth in certain sectors. Here’s our monthly analysis.

Sectors enjoying an upsurge from last year after five months of the year include Media, Energy & Power, Industrials and Retail, which included notable deals such as April’s announcement by JD Sports which said it will buy Hibbett (Nasdaq: HIBB) for $1.1 billion.

Andrew Dickow, Greenwich Capital Group

Greenwich Capital Group Managing Director Andrew Dickow points to four factors for the uptick in retail deal value:

  1. Economic stability and market recovery: “The retail sector, heavily impacted by economic fluctuations, has seen a rebound as consumer spending stabilizes. This sector-specific recovery has encouraged retail companies to engage in M&A to expand their market presence and operational capabilities​,” he says.
  2. High-value transactions: “Specific to retail, the luxury and convenience store segments have seen significant M&A activity,” Dickow says. “These high-value transactions are driven by consolidation efforts within these niches to achieve economies of scale and enhance market reach​​.”
  3. Technology and sustainability investments: “Retail companies are increasingly focusing on integrating advanced technologies and sustainable practices. This trend is driving M&A activity in the sector as companies seek to modernize their operations and meet consumer demands for sustainable products and practices​​,” he says.
  4. Portfolio optimization: “This is a general trend — it’s also very prevalent with Consumer Packaged Goods right now — but it has specific implications for the retail sector. Retail companies are actively divesting non-core assets and acquiring businesses that align more closely with their strategic goals, such as technology-driven companies or those with strong e-commerce capabilities​​,” he says.

All told, there were 53 mid-market deals in May compared to 78 in April, and the value of these deals dropped from $25.2 billion total in April to $18.9 billion in May. Year to date there have been 318 mid-market deals through May 31, compared to 352 deals through the same time period last year, while deal value ticked up a smidge over the first five months this year to about $98.1 billion from about $98 billion last year.

A notable real estate deal last month came when Henderson Park Capital purchased The Arizona Biltmore for $705 million from The Blackstone Group (NYSE: BX). With 705 rooms in the historic hotel, Henderson paid a neat $1 million per room.

In league tables, Goldman Sachs (NYSE: GS), JP Morgan (NYSE: JPM) and Jefferies still hold the top three spots in terms of number of deals (19, 18 and 12, respectively) and deal value (about $9.7billion, 9.5 billion and $6.3 billion, respectively).

Technology, healthcare and energy are still the top three performing sectors this year in terms number of deals (72, 61 and 34, respectively) and deal value (approximately $18 billion, $14.6 billion and $12.9 billion, respectively).

Reach Dickow at [email protected]

See the full list of May’s biggest mid-market deals here.