The middle market is facing the least hospitable M&A climate in years. With confidence low, credit tight and politics uncertain, the volume of deals that closed in the first quarter fell to levels last seen in the wake of the Lehman Bros. collapse. And while some sunlight peeked through the clouds as corporate divestitures soared at the end of the quarter, the moment didn’t last. Dealmakers on the lookout for signs of change in the spring found little to justify their hopes that activity in the second half of the year will prove more fruitful.

A look at the recent data on deal volume and value is discouraging. According to Mergers & Acquisitions’ analysis of the numbers from Thomson Reuters, only 330 middle-market transactions closed in the first quarter of 2016, the lowest deal volume for any period since the first quarter of 2009. (See related chart). At that point in time, the financial world was reeling from Lehman’s bankruptcy, and merely 236 mid-market deals were completed.

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