Prairie Middle Market Perspective Fall 2022

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Through mid-year 2022, closed middle-market M&A activity has held up well even with volatile public markets, inflation concerns and abundant uncertainty overriding the U.S. economy. The dollar volume of closed M&A deals in the first half of 2022 was off about 15% from 2021’s first half, with the number of closed deals falling about 22% from the first half of last year. Globally, closed M&A deal value was off by 20%, slightly higher than the declines seen in the U.S. middle-market volume data. M&A Deal activity in 2021 was at record levels which makes comparisons to last year challenging. However, it is not the volume declines but the trajectory of the declines that is of concern. We are seeing escalating reductions in closed deal activity each quarter as we proceed through 2022. Providing an offsetting positive element, most investment banking advisors are reporting very robust new business pitch activity in 3Q22 which implies potentially strong late 2022 and 2023 new deal activity. Current M&A deals take longer and have more business issues, so pitch activity may not lead to more closed deals, but at least it provides positive momentum to the market.

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