Look, economically, we’re in a pretty weird spot right now. Comparison to the post-pandemic highs of the recent past aren’t doing the numbers any favors,  but the situation – according to Bain & Company – is that overall worldwide M&A value dropped 44 percent in the first five months of 2023. For professionals in and around finance, it’s a big ‘yikes’ all around.

Deal flow might be down, but that doesn’t mean you’re out. You might feel like you’re hibernating in a barren, wintery M&A landscape, but you know who else hibernates? Bears. Now’s the time to be the bear and adopt sustainable, forward-facing deal flow management habits that keep you sharp when a fresh new season for M&A inevitably blossoms – and if you believe the data, that might just be sooner than later.


What’s the Situation?  

Sometimes, the key to moving forward is understanding how we ended up falling behind in the first place. If you’re feeling less deal flow and more deal creep, you’re not hallucinating, and you’re certainly not alone. Uncertain interest rates, failing banks, global recession anxieties, record inflation, and renewed interest in governmental anticompetition efforts are just some of the factors driving what we’ll gently call more “cautious” dealmaking.

Which brings us here, to a reality where leveraged deal value is down 54 percent in 2023, across private equity, PE add-ons and venture capital. Even compared to just last year, PricewaterhouseCoopers reports that deal volumes are down 4 percent in general, with deals valued at greater than $1 billion down 11 percent – that’s down 56 percent since their peak in 2021. Likewise, Reuters reports that private equity deals declined 48 percent in the third quarter of 2023 compared to the same period in ‘22.   


Bad Times, Good Deal Flow Management

Deal flow might not be great, but it also isn’t even close to dead. Especially in turbulent times, it becomes more important than ever to optimize what you do have on your plate. As ever, that’s where solid deal flow management strategies come into play. 

Tighter times don’t call for throwing your hands up and walking away. They just call for slightly different strats, like these:

  • Don’t stop sector screening. While strategic tech is on the downslope, other sectors (yes, there are other sectors) are largely holding steady or even trending upward. Strange times present a chance to branch out from the usual. Take this as a sign to break out of cozy sectors and play outside of your typical sandbox. 
  • Scale your deals. Scale-oriented dealmaking is as unsung as it is consistent and sustainable. Mid-market deals are historically less volatile than the big fish, and that remains true this year, too. While those billion dollar deals may be down 56 percent from the golden days, deals under $1 billion have declined by less than half of that amount. 
  • Look to capability investing. Even in the muck of ‘23, smaller deals have proven more resilient than massive M&A endeavors, especially when it comes to new markets and new IPs. Take it from PwC: “The M&A activity ahead may not all be eye-catching megadeals, which have ebbed since hitting their peak in 2021, but rather a healthier level of mid-market deals as companies pursue their strategic growth agendas. These smaller deals can also drive transformation and growth.”


Other Ways to Stay Productive  

When that good deal flow management returns – and trust us, it will return – you need to be the bear that emerges from the M&A cave full of protein and berries, ready to come out swinging. Tortured metaphors aside, now is the time to buckle down and shift focus to pre-sale preparation, especially for sellers. 

Reassessing the portfolio is one way to do that. Restructuring is going to be a keyword for the rest of ‘23 and heading into ‘24, at the very least. Net-zero carbon strategies are catching on, auto manufacturers are acquiring mining companies, mid-market deals are positioned to skirt mega-deal-centric regulations. We are fully outside of the box. Now’s the time to review your portfolio, ideally positioning it in a way that anticipates and embraces upcoming disruption. 

For sellers, this is the quiet-before-the-storm type moment that’s a perfect time for the three Ps: preparation, preparation and preparation. PwC recommends priming yourself for deal-readiness by identifying cost reduction opportunities, drafting a transformation strategy with detailed, well-sourced and thoroughly analyzed targets and KPIs, and taking the opportunity to establish new growth levers.


Now for the Good News

No matter what deal flow looks like at the moment, there’s hope on the horizon. As showcased by high-profile deals like Cisco’s takeover of Splunk, the Microsoft-Activision merger finally going gold and Smurfit Kappa Group’s $11 billion acquisition of WestRock, the beast is awakening. And that beast is the US, with American dealmakers advising on $365.51 billion worth of M&A in Q3 2023, a 35 percent glow-up from the same time in 2022. While big tech and sectors like advanced manufacturing are still down, energy and natural resources, financial services, media and retail are rising in valuation as of mid-2023. 

If you take away one thing from this ebb period, let it be this: use this time to make yourself deal ready. Remind yourself that times like this were practically made for due diligence. Like Bain says, “In a nutshell, do your homework, and be ready to act. We expect that the recovery will not be everywhere, all at once. Instead, certain industries will have the chance to carpe diem.” 

But first, you might want to carpe a little CapLinked – enhanced productivity features like Activity Tracker, audit trails and Q&A Assignments help lock in healthy dealmaking habits no matter what kind of quarter we’re having, so that you’ll be ready and primed to pounce when deals are officially back in season. 


Dan is a freelance writer with over a decade of experience, currently residing in Dallas, TX. Along the way, he’s been lucky enough to collaborate with brands including Fortune, The Motley Fool, Office Depot, MSN Money, and many more.



Bain & Company – M&A Midyear Report 2023: It Takes Two to Make a Market

PwC – Global M&A Industry Trends: 2023 Mid-Year Update

Reuters – Dealmakers See Rebound After US Activity Buoys Global M&A Volumes



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