Middle-market M&A continued to plunge in September, as it has all year, according to data from Refinitiv, but dealmakers are optimistic about things picking up in 2024.
There were 48 mid-market deals worth around $13.9 billion announced September. That is compared to 92 deals worth around $30.3 billion in September 2022. The Refinitiv data is based on North American deals valued between $100 million and $1 billion.
The technology, healthcare sectors and energy sectors continue to carry the load with 123, 116 and 59 deals announced so far this year, respectively. In one recent healthcare deal, Gurnet Point Capital and Novo Holdings have acquired Paratek Pharmaceuticals. The target’s product, Nuzyra, is a once-daily oral and intravenous antibiotic available in the U.S. for the treatment of adults with community-acquired bacterial pneumonia (CABP) and acute bacterial skin and skin infections
One mid-market banker says the foundation is in place for a robust M&A market, but it will depend on PE firms being able to raise funds. “Private equity firms are focused on deploying committed capital so that they can raise more capital and keep the fee machine running,” says Josh Benn, the global head of M&A advisory and consumer corporate finance at Kroll. “After a relatively slow period of new investment and capital return over the past 18 months, private equity firms’ pace of activity has accelerated during the second half of 2023 and will continue to increase through 2024. This dynamic alongside strong strategic buyer engagement will foster an active M&A market for the foreseeable future”
In the league tables, Goldman Sachs, JP Morgan, Bank of America hold the top three spots, respectively, in market share so far this year. Goldman has also advised on the most deals with 35.
One significant jump to note in the league tables is Piper Sandler going from 11th place last year to fifth place this year, while seeing its market share increase from 2.8 percent to 4.8 percent. The firm recently advised TPG on its acquisition of Forcepoint‘s global governments and critical infrastructure (G2CI) cybersecurity business.
“The middle market seems to have fared a little bit better this year than some other segments,” says Christopher Keefe, the chair of Nixon Peabody’s business & finance department. “It’s easier to have a buy versus build, plug-and-play type transaction in the middle market than it is in very large deals. Middle-market deals can be less exposed to leverage and can represent more of a strategic priority fit for many buyers in the market. As a result, we’re seeing more of these deals get done.”
See the full list of September’s biggest middle-market deals here.
