Market Update from the 2024 ACG Great Lakes Capital Connection^© Conference

An update on activity in the M&A markets. Observations from recently attended ACG Capital Connection event.

Three members of the Yellow Cardinal M&A Services team recently attended the Association for Corporate Growth (ACG) Great Lakes Capital Connection in Cleveland, Ohio. This event was attended by over 500 private equity groups, consulting firms, bankers, and business owners. It was a great opportunity to reconnect with many of our longstanding connections and get their perspective on the state of the M&A industry.

We met directly with over 50 private equity groups, attended some thought-provoking seminars, and enjoyed deliberating various M&A-related subjects with our peers. Coming out of the conference we noticed that there was consensus on several topics:

• “Next Quarter…” Almost every private equity group noted that they hear, whether from investment bankers or other advisors, that deal activity will pick up next quarter. This has been the case since the very beginning of 2024 and has seemingly stayed the narrative for quite some time.

• Largely, the consensus is that deal flow has picked up this year, but overall volume is still down relative to prior periods. Some buyers theorize that the current interest rate environment and upcoming election are impacting sellers’ timeline to sell, but there could be several other factors weighing on sellers.

• An immense amount of capital to invest still exists in the market with a limited number of high-quality deals. The number of quality deals has improved since last year and continues to improve as the year progresses, but high-quality deals are still in high demand.

• Buyers are still willing to fund deals with more equity, so valuation multiples are still strong for attractive companies in certain industries.

• Deals are taking longer and getting harder to get across the finish line. Buyers are spending more time on diligence and making sure that they have thoroughly vetted their potential investment, which has increased diligence periods and caused some deals to go on hold.

• Cincinnati continues to be an underbanked market relative to the number of attractive companies in the region. Our contacts were excited to hear that Yellow Cardinal M&A now has a seasoned investment banking team located directly in the Cincinnati market. Many groups commented that the number of deals that Yellow Cardinal is currently in market with exceeded a number of other M&A advisors at the conference, which speaks to Yellow Cardinal M&A’s growing success in the First Financial Bank footprint (OH, KY, IN, and IL).

As an owner, selling your business is one of the most significant decisions you will ever make. The process can be very complex, and you only have one chance to make the most of the opportunity. The team at Yellow Cardinal enjoys sharing our insights with owners and advisors. When the time is right, we’re ready to help you craft a favorable transition that rewards your hard work and investment, and positions the business for continued success. Contact us to discuss your specific situation.