M&A Statistics: The State of the Mergers & Acquisitions Landscape

As a financial writer, it’s easy to get overwhelmed with information. I often feel like I’m drinking from a firehose of the latest jobs data, chatter about interest rates, and corporate earnings reports.

But to get out of the weeds and find a low-resolution, big-picture image of the general shape of the economy, I like to look at M&A statistics.

Mergers and acquisitions (M&A), or the combination/consolidation of businesses through financial transactions, can help companies unlock tremendous value. M&A activity serves as a barometer for economic health, business confidence, and future expectations.

Key Takeaways:

  • The M&A market environment is recovering from 2022 lows as market sentiment improves.
  • Lower- and middle-market M&A deal volume and valuations are steadily increasing.
  • M&A activity favors acquiring new technology
  • Alternative financing models are gaining traction and increasing competition for smaller acquisitions.

Understanding the current M&A statistics can help you get a sense of the market and the outlook for businesses big and small. What do the stats say about the current M&A market, and what useful patterns and trends can we identify?

The M&A Market Environment Is Mixed but Improving

The current M&A market reflects a mixed but improving outlook for corporate consolidation deals.

Boston Consulting Group’s M&A Sentiment Index, a measure of dealmakers’ willingness to engage in mergers and acquisitions, registered a value of 89 by the end of 2024, compared to the 10-year average of 100. But this reading has been stable or rising throughout most of the previous two years.

BCG M&A Sentiment Index Over Time (2015–2024)

BCG M&A sentiment index

Image source: BCG M&A Sentiment Index

The number and value of M&A deals in the U.S. peaked in 2021 before dropping off in 2022 and remaining somewhat flat since.

Global M&A activity in the first six months of 2024 topped $1 trillion, representing about a 4% increase year-over-year. Deal volume in North America increased 6.2% in the first half of 2024 compared to the same period in the previous year. These stats suggest the continuation of a gradual recovery in domestic and international M&A.

mergers and acquisitions count and values

Image source: M&A Statistics | Institute for Mergers, Acquisitions & Alliances (IMAA)

The reduction of interest rates enjoyed in 2024 has led to more favorable funding conditions that help to explain some of this momentum. Higher financing costs and tighter capital availability have made larger M&A deals less lucrative for private equity firms.

Growing activity in lower-middle- and middle-market transactions in the current environment may show a thawing out of M&A activity and be a precursor to an uptick in larger-scale deals as financial conditions continue to loosen.

Lower and Middle-Market M&A Statistics

Big mergers and acquisitions completed by publicly traded companies make financial headlines, but most of the world’s M&A deals occur in the lower and middle market. And we have reasonably good statistics for lower-middle-market deals valued under $100 million. (However, less data is available for lower-market deals valued below $5 million.)

Small business deals less than $100 million in enterprise value have shown resilience and a faster recovery compared to larger transactions. By early 2024, deals of this size represented 77.8% of all disclosed acquisitions, up from 52% in 2023. These acquired small business’s valuations increased to 5.3x EV/EBITDA in the first half of 2024, compared to 4.8x during the same period the prior year.

Middle market M&A activity ($100 million–$500 million) also strengthened in 2024, with deal volume picking up to its highest level in two years.

U.S. Corporate M&A Deal Volume (Deals over $100 million)

US M&A deal volume statistics by year

Image source: M&A Outlook Signals Firming US Deal Market Activity in 2025 | EY.com

Average middle-market M&A valuations increased to 10.0x EV/EBITDA in early 2024, up about 5% from the prior year. Over the same span, upper-middle-market valuations were little changed, contracting slightly to 10.7x.

M&A valuation multiples 2023 vs 2024

M&A Trends

Today’s M&A statistics suggest a handful of trends emerging in the marketplace. The types of acquisitions being pursued and the methods for financing M&A deals stand out as particularly noteworthy and could indicate long-term shifts in the industry.

Industry Shifts

By number of small and mid-market deals, the top sectors for M&A activity in 2024 included healthcare, technology, media/telecommunications, energy, financial services, and industrial/manufacturing. Tech and telecom showed the strongest growth. The average deal value in industrial/manufacturing deals contracted somewhat, but the activity in the industry remained robust.

Across all industries and deal sizes, global M&A activity slowed early in 2024, according to research by PricewaterhouseCoopers (PwC). Deal values continued to grow year-over-year in some sectors (media, tech, hospitality & leisure, financials, and oil & gas), but receded in all others.

Acquirers today are prioritizing deals that enhance their tech stacks and future-proof their business models. Many mergers are being driven by a pursuit of transformational, cutting-edge technologies, especially generative AI.

Other technologies motivating transactions in recent years include advances in automation, tech-enabled business services, fintech, and sustainability/energy transition.

Adoption of Alternative Financing Models

Many M&A deals employ alternative financing models as a way of securing flexible terms, tapping into alternative lenders, and preserving equity.

In recent years, seller notes, earnouts, and rollover equity have become more common, especially for smaller deals. Although the percentage of deals with earnouts in 2024 decreased from 2023, they remain elevated above the three-year average.

This trend reflects a growing willingness among acquirers to adopt new financing models, increased private equity activity in the space, and the increasing use of innovative online platforms like CapitalPad for fundraising from pools of individual investors.

M&A Market’s Impact on Search Funds

The improving M&A market has presented exciting opportunities for small business sellers, strategic corporate buyers, private equity firms, and investment bankers in recent years.

But the picture is less rosy for independent acquirers of small businesses, such as search funds and independent sponsors.

A hotter M&A environment has begun to generate increased competition for smaller acquirers. Despite a record number of search funds launched last year, the number of acquisitions completed has steadily decreased from its peak in 2021.

Search fund activity by year

Image source: Stanford Graduate School of Business 2024 Search Fund Study

Increased competition from other financial buyers has pushed search funds to target smaller acquisitions. The median purchase price of search fund deals dropped to $14.4 million in 2024, compared to $16.5 million two years ago when this data was last collected.

Conclusion

In the aggregate, the complete picture that emerges from the M&A statistics today is a tale of steady economic recovery after a rough patch in 2022. U.S. businesses seem to expect stronger economic conditions ahead, as reflected by their appetite for mergers and acquisitions.

Many businesses large and small hope to secure their futures by acquiring businesses that bring complimentary or cutting-edge technology into the fold. And the adoption of alternative financing models brings new opportunities for matching business buyers and sellers with private investors and other nontraditional capital partners.

 

Updated: January 28, 2025.

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Jim Cirigliano

Jim is a financial writer and small business founder empowering small businesses with world-class editorial content. He is an investor and entrepreneur who understands the content creation needs of specialized industries, niche applications, and technical or complex subject areas.

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