2024 Q2 M&A Market Update

On July 15, 2024, Goldman Sachs announced that they beat revenue and earnings targets for the third straight quarter in a row as their earnings more than doubled with 150% jump in second quarter profits boosted by a resurgence of dealmaking and underwriting. Their CEO, David Solomon, noted that he was optimistic about the dealmaking landscape. After a period of stability, credit markets are opening up and interest rates are forecast to trend down. Although dealmaking in the billion-dollar Wall Street landscape isn’t exactly the same as what we experience on Main Street, it is a barometer suggesting a robust deal market for both Wall Street and Main Street looking forward. With the stock market hitting new highs, there is money available to be deployed for acquisitions.

Our recent experience in the lower middle market has been that there are many more buyers/ investors looking for healthcare deals than there are sellers looking to exit or recapitalize. It seems COVID 19 caused a general slowdown for many healthcare service providers, then there were staff shortages followed more recently by a period of stability where revenues are now starting to trend towards or above pre-COVID levels. It’s always best, if possible, to plan a transaction when things are trending up, which may explain the hesitancy of potential sellers.  As interest rates are adjusted downward and credit markets loosen, we expect this economic environment to have a positive effect on valuations overall in the year ahead and an increase in deal volume overall.

Beth DaSilva is the President of Fleetridge Pacific and M&A Transaction Advisor with over 20 years of experience helping business owners sell their companies.