M&A Market Picking Up Steam: A Look at Q3 Activity

There is finally some very good news in terms of M&A activity, with PitchBook reporting that the “M&A recovery is now hitting its stride.” In their Q3 2024 Global M&A Report, PitchBook data shows that in the first three quarters of this year, there was a marked acceleration in global M&A activity, with an impressive 27.6% jump in deal value and 13.3% growth in deal count over last year. 

As we look toward what will hopefully be an even more robust recovery in the months to come, below, we look at some key findings from the Q3 report.

• Corporate-led M&A was dominant earlier this year, as Private Equity activity remained sluggish due to the high cost of borrowing and sky-high interest rates. However, as we entered Q2 and Q3, PE activity began to pick up. PE firms are now benefiting from a “stealth” rate-cut cycle, and big banks have returned to the deal lending market. This has led PE’s share of M&A deal value to rise to 41.2% YTD after dropping in 2023. And YTD buyout volumes are up 24% in value and 10.4% in count compared to 2023.
• For cross-border transactions, North American buyers are targeting European companies, with European M&A deals featuring a North American buyer totaling $37.5 billion through Q3. This is similar to 2023 but still well below the peak of $116.1 billion in 2022. The cross-border flows to Europe from North America are outpacing the reverse flows due in large part to the strength of the US dollar compared to the euro and pound, as well as lower purchase price multiples on European targets.
• In the first three quarters of this year, M&A activity in North America has almost surpassed that of 2023. To go even further, when annualized, they expect the deal value to exceed last year by about 30%. So far this year, deal value has exceeded $1.5 trillion over 13,509 deals announced or closed between Q1 and Q3.
• In looking at the top 10 deals in North America in Q3, the value totaled $111.6 billion, a 6% increase YoY. And the top deal came in at $35.9 billion. These larger deals were concentrated in the technology and consumer sectors, with three each, and business services, energy, financial services, and healthcare rounded out the group with one deal each.  Of the top 10, PE sponsor-backed deals made up 60% of transactions. For comparison, they made up half in Q2, 20% in Q1, and none in Q4 of 2023.

These are just some of the highlights from the PitchBook report that show great promise for a continued rebound in M&A activity. As big banks return to lending and attempt to take back share from nonbanks and there are more potential interest rate cuts on the horizon, we will hopefully continue to get good reports as we move into 2025.