Industrial Distributor M&A Pulse – Q1 2023

Q1 2023 – M&A MARKET RECAP

Following an extensive period of unprecedented M&A activity during the COVID pandemic, characterized by a surge in both the number and value of completed deals, the market has now reverted to normal levels. In the first quarter of 2023, the number of closed deals declined, with only 85 transactions in the US and 190 globally. This represents a 36% and 35% drop, respectively, compared to the same period in 2022. Q1 2023 recorded the lowest volume of closed transactions since the peak of the pandemic in Q2 2021. Much of this decline is driven by a spike in inflation and rising interest rates which triggered concern over a global economic slowdown, according to the latest M&A report from GlobalData. Despite this slowdown, experts remain optimistic that debt markets will recover and there will be a resurgence in demand that will fuel a stronger volume of deals as we progress further into 2023.

In Q1 2023, the Industrial Production Index grew 1% to reach 103.0 in March 2023, while the Consumer Price Index increased by approximately 1% to 301.8 from December 2022. During the same period, the Purchasing Managers’ Index (PMI), ISM Production Index, and ISM New Orders Index entered contraction territory with March 2023 coming in at 47.7, 46.3, and 44.3, respectively (values below 50 indicate contraction), a decrease of 4.3%, 1.4%, and 2.0%, respectively, from December 2022.

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