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

Associated Press

06-02-2025

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.