Capstone Partners & IMAP Release 2024-2025 Trends in Global M&A Research Survey:

Rhea-AI Summary

Capstone Partners and IMAP have released their 2024-2025 Trends in Global M&A Survey Report, based on insights from 100 M&A advisors across 54 countries. The survey, conducted between September-November 2024, reveals optimistic market outlook for 2025.

Key findings show that only 38% of investment bankers expect a recession in 2025, down 22% year-over-year. A significant 79% of advisors anticipate increased deal flow in 2025, while 88% reported strong middle market M&A performance in 2024. Private equity activity outlook is bullish, with 51% expecting increased sponsor dealmaking.

The survey highlights that 69% of bankers identified recurring revenue as important for acquisitions. 46% of advisors expect moderate valuation increases in 2025, with FinTech and Healthcare sectors commanding highest EBITDA multiples. Business owner retirement (54%) was the primary sell-side driver in 2024, while industry consolidation is expected to lead in 2025.

Easing Recession Fears, Robust Private Equity Activity Drives Strong 2025 M&A Market Outlook

BOSTON, Feb. 6, 2025 /PRNewswire/ -- Capstone Partners, a leading middle market investment banking firm, in conjunction with its partner IMAP, a leading global investment banking advisory firm, released its annual Trends in Global M&A Survey Report, with insights from M&A advisors across the world. This report combines Capstone's in-depth investment banking knowledge with proprietary data obtained from 100 participating IMAP M&A advisors across 54 countries. Conducted between September 19, 2024, and November 5, 2024, the survey captures sentiment at a pivotal moment in global middle market M&A, providing insight into M&A market activity throughout 2024 and anticipated dealmaking conditions in 2025.

Key Findings:

• Advisors' economic outlook continued to improve as central banks began to cut interest rates, providing a healthy backdrop for 2025 M&A activity. Only 38% of total investment bankers surveyed expect a recession to be very or somewhat likely in 2025, down 22% year-over-year (YOY) and 40.2% compared to 2023's outlook.
  
  
• As M&A activity likely neared or reached its trough in 2024, the vast majority (79%) of total advisors surveyed anticipate 2025 deal flow to increase. This marks a rise of 28% YOY and 50.4% compared to 2023.
  
  
• Middle market M&A activity in 2024 continued to remain strong compared to the broader market, with 88% of total investment bankers surveyed indicating that middle market dealmaking outperformed or remained in line with the broader market.
  
  
• Advisors' outlook for private equity activity is increasingly bullish for 2025, as more than half (51%) of investment bankers surveyed expect sponsor dealmaking to increase.
  
  
• Buyers have become increasingly selective in their acquisition pursuits, prioritizing target companies with robust financial visibility. Among total investment bankers surveyed, 69% indicated that recurring revenue was the most important characteristic to acquirers in 2024, representing an increase of 6% YOY.
  
  
• M&A purchase multiples are expected to tick up in 2025, with 46% of advisors surveyed anticipating a moderate rise in valuations compared to 2024. Advisors showcased significant consistency regarding anticipated 2025 industry valuations, with the Financial Technology & Services and Healthcare industries expected to continue drawing the highest average typical M&A EBITDA multiples.
  
  
• In 2024, 54% of advisors surveyed identified that business owner retirement was the top factor for sellers initiating an M&A transaction in 2024. For 2025, industry consolidation is anticipated to be the primary sell-side motivator, which is likely a reflection of advisors' expectations for robust M&A volume gains in 2025.
  
  
• To achieve a successful M&A deal for a seller, nearly all (97%) advisors pointed to setting a realistic deal valuation as very or somewhat important. This aligns with the primary deal closing hinderance advisors faced throughout 2024, as 60% experienced excessive valuation expectations from sellers.

Through this research, Capstone Partners and IMAP have tracked notable impacts on the global M&A market, current economic environment, as well as M&A advisors' expectations on pricing trends and regional risks and opportunities moving forward into 2025.The report also provides an analysis of sell-side M&A considerations for middle market business owners looking to pursue a liquidity event.

To access the full report including a breakout of the results by industry and region, click here.

ABOUT CAPSTONE PARTNERS

For over 20 years, the firm has been a trusted advisor to leading middle market companies, offering a fully integrated range of investment banking and financial advisory services uniquely tailored to help owners, investors, and creditors through each stage of the company's lifecycle.  Capstone's services include M&A advisory, debt and equity placement, corporate restructuring, special situations, valuation and fairness opinions and financial advisory services.  Headquartered in Boston, the firm has 175+ professionals in multiple offices across the U.S. With 12 dedicated industry groups, Capstone delivers sector-specific expertise through large, cross-functional teams.  Capstone is a subsidiary of Huntington Bancshares Incorporated (NASDAQ:HBAN).  For more information, visit www.capstonepartners.com.

ABOUT IMAP

IMAP is an International Mergers and Acquisitions Partnership with a 50-year track record, more than 450 M&A professionals worldwide and a presence in 51 countries. IMAP has closed over 2,200 transactions valued at $130 billion in the last 10 years and is consistently ranked in the world's Top 10 M&A advisors (Refinitiv) for mid-market transactions. For more information, visit www.imap.com.

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SOURCE Capstone Partners

FAQ

What percentage of M&A advisors expect deal flow to increase in 2025?

79% of M&A advisors surveyed expect deal flow to increase in 2025, marking a 28% rise year-over-year and 50.4% increase compared to 2023.

How many M&A advisors expect a recession in 2025?

38% of investment bankers surveyed expect a recession to be very or somewhat likely in 2025, representing a 22% decrease year-over-year.

What are the highest-valued sectors for M&A EBITDA multiples in 2025?

Financial Technology & Services and Healthcare industries are expected to continue drawing the highest average typical M&A EBITDA multiples in 2025.

What percentage of M&A advisors expect valuation increases in 2025?

46% of advisors surveyed anticipate a moderate rise in M&A purchase multiples and valuations compared to 2024.

What was the primary reason for selling businesses in 2024?

54% of advisors identified business owner retirement as the top factor for sellers initiating M&A transactions in 2024.

What is the most important characteristic buyers looked for in 2024 acquisitions?

69% of investment bankers indicated that recurring revenue was the most important characteristic to acquirers in 2024, up 6% year-over-year.