Acquirers are sensing opportunity in the market-wide rerating in the wake of market volatility. Receding are the sky-high valuations that kept otherwise eager buyers on the sidelines, raising the prospect of private equity firms inking more deals in the near term. One indicator of the current mood music? A rise in unsolicited offers, according to a recent note by William Blair. Targets requiring regular access to capital markets might be newly receptive to takeover interest in choppy debt and equity markets.

“Rising interest rates over the next economic cycle will exacerbate this issue, making additional capital raises more tenuous,” the note reads.

The phenomenon, while describing public companies in particular, is likely universal. Middle-market private equity firms increasingly see market turbulence as an opportunity to secure reasonable valuations in sectors otherwise valued frothily. Firms are still pursuing targets in their typical geographic, Ebitda, and sector strike zones, but are showing less willingness to stretch on valuation.

That could spell business as usual for now, as PE continues to jockey for targets to leverage technology across their portfolios. But should volatility continue, buyers pushed to the sidelines could finally get a larger slice of dealflow.

Brandon Zero