Projections indicate a rebound in M&A transactions, with a 13% rise in deal volume projected for US private equity and a 12% increase for corporate M&A. This positive outlook for 2024 M&A activity may stimulate greater buyer interest and lead to higher valuations.

In the fast-paced world of dealmaking, various economic indicators, geopolitical tensions, and market sentiments are interconnected, which can lead to significant shifts in the market landscape in a short period. Over the past several years, we have witnessed a fascinating journey in M&A activity, from record highs due to favorable economic conditions to sudden downturns triggered by policy changes. This rollercoaster ride offers valuable insights into the complexities of dealmaking and the strategies that emerge amidst uncertainty.

In 2021 and early 2022 historic highs in M&A activity were driven by favorable economic conditions, such as moderate inflation, robust economic activity, and low interest rates. However, the Federal Reserve's historic tightening cycle in March 2022 triggered a sudden pullback, and dealmaking activity slowed significantly as the cost of capital surged, and uncertainties loomed large. Private equity deal volumes in the US were substantially lower in 2023 compared to the peak observed in 2021, with a similar trend observed in corporate M&A transactions. These numbers underscore the ripple effects of macroeconomic shifts on the dealmaking landscape, serving as a barometer of broader economic trends.

Despite the downturn, there are glimmers of optimism for the future, as a CEO outlook survey hints at a renewed enthusiasm for deal activity. A significant proportion of US CEOs expressed interest in completing M&A transactions in the coming months, with joint ventures and strategic alliances emerging as key alternative strategies for navigating uncertainties. This reflects a shift towards collaborative approaches to innovation and growth. The survey highlights the emphasis on investments in generative AI (GenAI), indicating a growing recognition of the transformative potential of emerging technologies. While uncertainties linger regarding the trajectory of AI development, the willingness to invest underscores a proactive stance toward embracing innovation and driving future growth.

There is an optimistic future for M&A, with a gradual recovery in PE M&A activity expected through 2024, following a 19% contraction in 2023. It is predicted that there will be a 13% increase in PE deal volume in 2024, which would still leave deal activity about 8% below the 2022 level and 18% below the 2021 peak. While the shortfall relative to recent peaks will be notable, the more important development is that PE deal volume growth is likely to surpass its pre-pandemic pace next year. Between 2010 and 2019, PE deal volume grew at a 9% compounded annual growth rate (CAGR).

The journey of M&A activity in recent years has been remarkable, with periods of prosperity and uncertainty. Economic indicators, policy decisions, and market sentiments all play a significant role in shaping the landscape of dealmaking. Although challenges may arise, businesses have shown resilience and adaptability, using proactive strategies and collaborative approaches to pave the way for future growth. With optimism for a gradual recovery on the horizon, we should embrace the lessons learned and the opportunities that lie ahead. Agility, foresight, and a willingness to embrace change will be the keys to success in the fast-paced world of dealmaking.

Written by Brigitte Grava

5 March 2024

Versailles Group, Ltd.

Versailles Group is a 37-year-old boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987. 

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President - Versailles Group, Ltd.

+617-449-3325

Global M&A activity for the first quarter of 2017 was robust.  There have been US$1.9 trillion in announced, completed, or pending M&A transactions.  In comparison with Q1 2016, M&A activity increased by an incredible 72%, which is partially due to a weak start of 2016.

In the US, M&A deal activity increased in Q1 2017.  Specifically, the value of M&A transactions was 13.2% above Q1 2016.

In the middle market, there were 2,643 transactions for the quarter, the best first quarter since 2007.

Internationally, European M&A in the first quarter increased 16%, in comparison to the same period in 2016, to US$215.3 billion.  This transaction value was the best first quarter since 2008.  British M&A activity remained relatively strong in the first quarter of the year despite expectations of a slowdown ahead of the country's exit from the European Union.

M&A involving Asian companies fell 39% in the first quarter of 2017 to US$176 billion, the lowest level in nearly three years.  Tighter regulations in China have made it tougher for Chinese firms to launch takeovers overseas, which had a major impact on the region's overall deal-making in the first quarter.

There are a number of strong contributing factors to increasing M&A activity this year. First, sales and earnings growth is continuing, which portrays strong aggregate demand.  Rising demand encourages CEOs to make acquisitions to expand their businesses.  In addition, companies need to demonstrate growth to shareholders, which provides another reason to make acquisitions.  Second, the slowdown in emerging markets is forcing multinationals to find new avenues of growth.  M&A is actually the quickest route to growth.  Sometimes, it’s easier and less risky than innovation or cost-cutting.  Third, technology is also driving M&A activity.  Disruptive industries such as Artificial Intelligence, FinTech, and the Internet of Things are all continuing to contribute to M&A activity.

To summarize, overall, the M&A outlook for the rest of 2017 looks very favorable.

Written by Donald Grava

27 April 2017

Versailles Group, Ltd.

Versailles Group is a 30-year-old boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987. 

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President - Versailles Group, Ltd.

+617-449-3325

Global M&A Has Best January Since 2000

2016 - A Financial Reap

As we leap into 2017 and begin to look at the future ahead, we must also look at some of the most impactful events that occurred in 2016.  While a full narrative of 2016 could fill a book, this is just a brief overview.  The exciting part is that 2016 has set the stage for robust M&A activity in 2017.

2016 began with Wall Street indices declining a record 10% in the first two weeks of trading, which marked the worst two week start for the stock market in history.  This downward spiral could be attributed to China’s slowing economy and depreciating currency.  As the stock market continued to plunge, oil followed suit, dropping to below US$30/barrel early in 2016.  The amalgamation of falling stock prices and a huge oil oversupply were the driving forces to the massive drop from the 2014 fourth quarter price of approximately US$100 per barrel.  Throughout the year we saw a rebound in not only stocks, but oil as well, primarily due to the supply rebalancing and various OPEC agreements limiting production in 2017. 

The next major event came in June, when we saw the UK vote to leave the European Union, causing massive unrest regarding the future of markets and international trade.  US markets fell in the days following Brexit, but rebounded in a rally that erased the initial decline. 

As a whole, 2016 was the worst year the US has seen for IPOs since 2003, with capital raised from new issues down 40% from 2015.  According to Jonathan Gertler, CEO and managing partner of Back Bay Life Sciences Advisors, there is no debate on whether the IPO market is softer than in recent years, and he believes it to be mainly due to volatility in the US economy and “an exuberant market that drove valuations exceedingly high,” in the biotech industry specifically.  He went on to say that in the current market there is an abundance of uncertainty, which does not bode well for high-risk stocks, newly public companies specifically.

A portion of this uncertainty that Gertler spoke about can be attributed to the surprise election of Donald Trump, as many firms and businesses prepared for an economy with Hillary Clinton in the oval office.  On November 8^th, we saw the markets being agitated as the polling numbers continued to pour in favoring Trump, but this rally continued to build upon itself through the holidays.  Major indices saw gains of between six and twelve percent through the end of year as many traders continued to bid up stocks as they “saw” deregulation, lower taxes, and increased infrastructure spending in the near future. 

As the markets have improved since the Nov. 8 election, the Federal Reserve decided to raise interest rates by 25 points in December.  Many believe the rate hike was a product of higher home prices, decreased unemployment, and improved confidence in the market that led to the Nov-Dec rally following the election.  Traders currently expect around two or three additional rate hikes for 2017, and according to the December Fed meeting minutes, rate hikes may be higher than previously expected in order to better control the growth of the economy. 

In the final days of 2016, markets hit records highs, with the Dow coming ever so close to the 20,000 mark, which many investors believe is simply a psychological barrier.  While 2016 had many quick turns and shocks (Brexit, Trump, etc.), the market and economy as a whole were able to come out on top in terms of growth and prosperity.  

The stock market exuded great resiliency in 2016, which began with a record-setting worst market performance in history to finish at record highs and prepare the US for a prosperous 2017.  

With regard to M&A activity, 2016 was the third best year ever; however, M&A decreased between 16 and 20 percent from 2015 levels.  M&A activity is expected to be exceptionally strong over the next two or three years, but will peak in 2017.  Therefore, people interested in completing a transaction should execute now.

Versailles Group, Ltd.

Versailles Group is a 30-year-old boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987. 

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President - Versailles Group, Ltd.

+617-449-3325

11 January 2017

M&A Outlook for 2017

M&A activity, in 2017, is expected to pick up dramatically for four reasons.  First, the strong equity markets are generating optimism as they are usually a leading indicator.  Second, in a recent survey, an unprecedented number of business owners or executives claimed they are planning an M&A transaction in the next 12 months. Third, many domestic and European companies have accumulated large cash balances that are available for acquiring new businesses.  Fourth, private equity firms are sitting on a record US$1.1 trillion in un-invested capital and are expected to boost the number of completed transactions globally.

It’s expected that the North America M&A market will be strong for the next three years, particularly in the US.  However, M&A transactions in the US will peak at US$1.5 trillion in 2017, which is indicated in the chart below. 

Logically, sellers should take advantage of 2017’s robust forecast.

On a global scale, US$2.7 trillion of M&A transactions were completed in 2015.  It’s been forecasted that US$3 trillion of M&A transactions will be closed in 2016.  In 2017, it’s expected to increase, again, to US$3.4 trillion.

With regard to the European market, inbound M&A transactions, by US companies taking advantage of a stronger US dollar, are expected to increase.  The UK, Germany and Spain are the most attractive investment destinations, while France and Italy remain less interesting.

On the other side of the world, the re-emergence of Asia as one of the world’s most dynamic growth stories is steady and striking.  China Yuan’s depreciation and the bursting asset bubble have spurred increasing outbound activities by Chinese buyers into neighboring Asian countries as well as developed countries.  At the same time, the Chinese Government is starting to control this outbound activity, which may alter some of this activity.

Lastly, the Africa and Middle East markets are worth paying attention to as oil prices rebounded after OPEC announced production cuts. A recovery in oil prices will enable more available funding, which subsequently may boost deal-making activities in the region.

Versailles Group, Ltd.

Versailles Group is a 30-year-old boutique investment bank that specializes in international mergers, acquisitions, and divestitures. Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million. Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987. 

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President - Versailles Group, Ltd.

+617-449-3325

15 December 2016

Record October for M&A Deals 

Reflects Current Market Conditions

The US M&A market is on a roll, which is good news for both sellers and buyers in the middle market.  

A series of high-profile deals announced in October makes it the biggest month ever for M&A transactions and even surpassed the epic deal making surge in January 2000. Mega deals are driving activity and are almost too numerous to count, e.g., the oil-and-gas business combination of General Electric and Baker Hughes, the telecom tie-up of Century Link and Level 3, and AT&T’s acquisition of Time Warner, etc.

Another good example in the global semiconductor sector is Qualcomm’s US$47 Billion acquisition of NXP Semiconductors, which notched the biggest semiconductor targeted M&A deal on record globally.

Top 5 Global Tech Targeted M&A Deals on Record

So far this year, US$1.6 Trillion of M&A transactions has been announced in the domestic market.  It reflects easy financing conditions, more confidence in the economic and business outlook, and keen foresight on the part of management teams.

The current economic environment of low interest rates and high stock prices have encouraged deal making.  Cheap borrowing costs makes it easy to finance deals, while high stock prices provide companies with higher valuations.  

With unprecedented economic conditions, owners of middle market businesses, in particular, have a continued incentive to start or keep doing deals.

Versailles Group is a 30-year-old Boston-based investment bank that specializes in international mergers, acquisitions, and divestitures.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million.  Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987.  

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President

+617-449-3325

November 15, 2016

Global M&A Rebounds With Newfound   Attractiveness in Europe

With mega deals leading the market, the global M&A market showed signals of rebounding in Q3.  Compared to US$1.0 trillion in Q1 and US$1.1 trillion in Q2, the value of global M&A increased to US$1.2 trillion in Q3, marking the second consecutive quarterly improvement.  In all there were 19,416 transactions announced during Q3 and 11 transactions valued at more than US$10 billion each.

Regarding deal value, the US led the market, followed by UK, China, Canada and India.  US companies remain top attractions for global investors as US$416 billion of deals were completed with US targets in Q3.  These US transactions accounted for 40% of the global market and were more than double the deal value of either the UK or China.  

The chart below shows the top five global target countries by deal value.

In terms of volume, most of the M&A deals were concentrated in US, followed by China, UK, Canada and Germany, continuing the trend for the first half of 2016. 

It is worth noting that M&A activities in Germany have remained resilient in the face of slower growth and tremendous volatility in the global market, with both the volume and value of transactions remaining close to the 2015 peak level.  What made Germany stand out in the global M&A market rankings is the giant US$132 billion deal between SABMiller and AB InBev, which is the largest deal by value in Q3 worldwide.

Interestingly, the ever-increasing deal value in UK is bucking the trend in global M&A market.  Since the Brexit vote, there have been rumors that the level of mergers and acquisitions activities across Europe would be threatened; however, the positive M&A data in Q3 2016 signaled newfound attractiveness of European M&A.

Versailles Group is a 30-year-old Boston-based investment bank that specializes in international mergers, acquisitions, and divestitures.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues greater than US$2 million.  Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987.  

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President

+617-449-3325

November 1, 2016

M&A Activity - First Half 2016

Top Five Countries

With regard to M&A in the global arena, it’s fascinating to observe which countries attract the most activity and how that evolves over time.  The charts below reflect the top five countries with the highest deal value and volume for the first six months of 2016.

The United States and China have been able to maintain their M&A leadership in the first half of 2016.  In terms of deal volume—the number of transactions completed worldwide—the US accounted for 23% of the deals completed while China captured 10% of the deals worldwide.

The chart below represents the number of M&A transactions completed by country in the first six months of 2016.  The US and China dominate this category, with 10,151 and 4,519 deals completed respectively.  When compared to the first quarter, the breakdown by volume for these five countries has remained remarkably similar.  Each country has been able to continue closing deals at roughly the same pace. 

Represented in the chart below is the value of M&A transactions completed by country, for the top five countries, in the first six months of 2016.  The US and China are again leaders in this category.  Collective deal value in the United States reached US$633,441MM, and China’s total transactions were valued at US$390,570MM.  Switzerland remains in the top five countries for deal value, which is uncommon; however, during Q1 Syngenta was acquired by ChemChina, and this one large deal is in part responsible for Switzerland’s high rank.  

Two countries to keep an eye on for the remainder of the year are Australia and France.  Lately, Australia has been receiving media attention for potential growth in M&A deals.  For the first half of 2016, Australia came in only 282 deals behind Germany.  It will be interesting to see if Australia is able to push up into the top five countries for volume next quarter.  Likewise, France is trailing Canada in the rankings for deal value so far in 2016.  As M&A activity is likely to experience shifts throughout Europe after the Brexit vote, M&A activity by county may look slightly different next quarter.

Versailles Group is a 29-year-old Boston-based investment bank that specializes in international mergers, acquisitions, and divestitures.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues between US$2 million and US$250 million.  Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987.  

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

For additional information, please contact

Donald Grava

Founder and President

+617-449-3325

August 4, 2016

Worldwide, middle market M&A transactions, those with transaction values less than US$1 billion, have been occurring at a rapid pace in the first month of Q4. Middle market M&A in the United States, in particular, is seeing tremendous activity whereas M&A in Europe is continuing to struggle.

In the US, at this pace, we expect over 4,000 transactions in Q4. This will represent an increase of over 11% as compared to the 3,604 transactions in Q4 of last year. This growth can be explained by a number of factors, but most importantly, corporations are using some of their large cash balances and the ability to issue low interest debt to pursue synergistic and other acquisitions.

Traditionally, companies use their excess cash for either capital expenditures or acquisitions. According to a recent study published by Goldman Sachs, capital expenditures are not increasing as companies are deploying their cash for acquisitions, which provide immediate access to growth and less risk. This is, perhaps, the largest single driver in the current middle market M&A boom in the US. Furthermore, low interest rates are enabling companies to issue debt quite cheaply thereby helping companies without enough cash to fund acquisitions.

In Europe, the M&A landscape is facing challenges due to various factors such as economic uncertainty, political instability, and regulatory changes. These uncertainties are causing hesitation among companies to engage in M&A activities, leading to a slower pace of transactions compared to the US market.

Despite the struggles in Europe, the Middle East and Asia are also experiencing an increase in middle market M&A transactions. The Middle East, in particular, is seeing a surge in activity driven by the region's efforts to diversify its economy and attract foreign investments. Asia, on the other hand, is benefiting from a strong economic growth trajectory and an increasing appetite for cross-border acquisitions.

Overall, the global middle market M&A landscape is dynamic and evolving, with different regions experiencing varying levels of activity. Companies are strategically leveraging their resources and taking advantage of favorable market conditions to pursue growth opportunities through M&A transactions.

Versailles Group is a Boston-based investment bank that specializes in international mergers, acquisitions, and divestitures.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues between US$2 million and US$250 million.  Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services, and has been completing cross-border transactions since its founding in 1987.  

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.

The most notable M&A news in Q3 was that there were more transactions in the United States/Canada region than there were in Europe. This is unusual, but we fully expect it to continue in the coming quarters as there seems to be limited progress in the resolution of the economic issues in Europe.

In Q3 the total number of M&A transactions in the United States/Canada increased by 137 to 4,372, which represented a 3% increase year-over-year. The Africa/Middle East, Asia Pacific, and Latin America/Caribbean regions all saw larger percentage increases during the same time period, 4%, 9%, and 9%, respectively. The only region that experienced a decrease in Q3 was Europe, where M&A activity dropped by 12% to 4,220.

The net result of all of these changes was that the combined number of transactions worldwide fell by 1% year-over-year, from 12,146 to 11,993.

Historically, Q4 is the busiest quarter for M&A. Therefore, we are expecting a strong fourth quarter in most regions.

The most notable M&A news in Q3 was the significant increase in transactions occurring in the United States/Canada region compared to Europe. This shift is quite unexpected, but it appears to be a trend that will persist in the upcoming quarters due to the ongoing economic challenges faced by European countries. The divergence in M&A activity between these two regions reflects a broader narrative of economic uncertainty and market dynamics that are influencing global investment trends.

Versailles Group is a Boston-based investment bank that specializes in international mergers, acquisitions, and divestitures.  Versailles Group’s skill, flexibility, and experience have enabled it to successfully close M&A transactions for companies with revenues between US$2 million and US$250 million.  Versailles Group has closed transactions in all economic environments, literally around the world.

Versailles Group provides clients with both buy-side and sell-side M&A services and has been completing cross-border transactions since its founding in 1987.  

More information on Versailles Group, Ltd. can be found at www.versaillesgroup.com.