Q2 2023 – US & Global 2023 Dealmaking
Transportation and Logistics (“T&L”) transactions softened during Q2 2023 when measured against the record levels achieved in 2021 and 2022. During the second quarter of 2023, 31 US-based transactions closed, contrasting with the 72 US-based closed transactions in the second quarter of 2022. The global market followed a similar trend, with deal volumes decreasing by 38.2% in the same period. Economic headwinds have contributed to this slowdown, with uncertainty surrounding the cost of capital, a stressed supply chain, and a higher required return on assets. Specifically, the Federal Reserve’s continual rate hikes and uncertainty in Europe create caution amongst financial buyers. Despite these global factors, US deal volumes by strategic buyers remain strong. The US trailing twelve period ended June 2023 saw a 24.8% uptick above 2018-2020 average deal volumes by strategic buyers.
Financial buyers maintain near-record levels of capital, ready to deploy into M&A. As a result, financial buyers are eager to participate in deal processes; however, valuations are not as aggressively priced as in previous years, and buyers include structure in their offerings to maintain stable earnings. High-performing assets continue to expand market share and gain the most interest as buyers focus on quality and differentiated assets. Given market dynamics, financial buyers are increasing platform companies’ hold times and concentrating on add-on acquisitions.
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