Navigating The Unpredictable: A Recap Of M&A In 2023

Midway through the year, I published an article titled "Don't Panic – The M&A Outlook in 2023," which aimed to calm nerves amid the prevailing uncertainty in the market. As we approach the close of the year, it is evident that the US economy has defied the gloomy predictions that loomed at the beginning of 2023, steering clear of a recession. The resilience is remarkable, and a deeper dive into the dynamics reveals some interesting trends.

One of the key factors contributing to the robustness of the markets has been the sustained wave of consumer spending. Contrary to expectations, the economy has been buoyed by extensive consumer activity, with the surge likely stemming from accumulated savings during the pandemic. This unexpected resilience has driven the positive outlook for the latter half of the year.

The spotlight, however, remains on the tech giants often referred to as the "magnificent seven" – Amazon, Apple, Alphabet, Meta Platforms, Microsoft, Nvidia, and Tesla. These industry juggernauts have shouldered the majority of market returns, showcasing their ability to weather economic storms and emerge as beacons of stability amid uncertainty. Their influence on the market cannot be overstated, and their performance has been a crucial factor in shaping the overall economic narrative.

Interest rate increases throughout the year are a significant element in the M&A landscape. The December Fed meeting kept interest rates steady, a move that has surprised many. The consensus is that these rates will likely remain relatively level through the beginning of 2024, with projections indicating potential rate cuts in the latter part of the year. However, geopolitical risks continue to cast a shadow amidst the economic successes. Concerns involving Russia/Ukraine tensions and the situation in Israel add an unpredictable element to the equation. These geopolitical hotspots could impact global markets and introduce new challenges for businesses navigating the M&A landscape.

On a positive note, fundraising has gained momentum, injecting optimism into the M&A sphere. The influx of capital suggests that investors remain confident in the market's potential, further fueling activity. As we approach the year's final weeks, the fourth quarter has proven to be as active as ever, with several deal closings pending. This flurry of activity is a testament to the resilience of the market and the determination of businesses to forge ahead despite uncertainties.

Looking ahead to the coming year, buyers will be re-entering the market in Q1, off the heels of many closed transactions. M&A confidence remains high for the first half of the year, given our daily conversations with private equity funds and other businesses strategically seeking acquisitions for growth. Benchmark's role as M&A specialists is to help you understand the ever-changing landscape of the M&A markets and how economic, geopolitical, and global factors influence them. The message to businesses is clear: don't wait to go to the market and sell your business. The current conditions provide a window of opportunity, and seizing it may be the key to success in an ever-evolving economic landscape.

Author
Tyrus O’Neill
Managing Partner
Benchmark International

T: +1 615 924 8545
E: oneill@benchmarkintl.com

Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkIntl.com

Europe: Michael Lawrie at +44 (0) 161 359 4400 / Lawrie@BenchmarkIntl.com

Africa: Anthony McCardle at +27 21 300 2055 / McCardle@BenchmarkIntl.com

ABOUT BENCHMARK INTERNATIONAL:

Benchmark International is a global M&A firm that provides business owners with creative, value-maximizing solutions for growing and exiting their businesses. Benchmark International has handled over $10 billion in transaction value across various industries from offices across the world. With decades of M&A experience, Benchmark International’s transaction teams have assisted business owners with achieving their objectives and ensuring the continued growth of their businesses. The firm has also been named the Investment Banking Firm of the Year by The M&A Advisor and the Global M&A Network as well as the #1 Sell-side Exclusive M&A Advisor in the World by Pitchbook’s Global League Tables.

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