Q1 2023 – US & Global 2023 Deal Outlook
Mergers and acquisitions within the Transportation and Logistics “(T&L)” sector are no longer reaching the levels observed during the record-breaking highs of 2021 and 2022, however, they are still in line with historical averages. In the United States, deal volumes experienced a decline from 60 closed transactions in Q1 2022 to 44 closed transactions in Q1 2023. Globally, a similar trend is being observed with deal volumes down 42% in Q1 2023 compared to Q1 2022. This decrease in deal volume can be attributed to the combination of rising interest rates and economic instability, impacting both debt providers and buyers. Specifically, the Federal Reserve implemented two interest rate hikes in the first quarter of 2023, causing an expectation of a future recession and financial uncertainty.
Buyers are aware of the heightened risks and are adjusting their investment thesis by targeting top-tier assets with considerable insulation to market volatility. The T&L industry is poised to remain resilient amidst market volatility, driven by its focus on value-added services, innovative customer solutions, and the consistent demand in all markets. Companies that match this profile have and will continue to see a premium valuation due to the amount of dry powder that needs to be deployed and will be viewed as safe-haven assets amidst the prevailing economic uncertainty.
Read Transportation & Logistics M&A Pulse Q1 2023 Full Report