As noted in our Q4 2022 edition, we expected volatility and uncertainty to define the M&A market in the first half of 2023 due to the continued impact of macroeconomic uncertainty, the inflationary environment, and increasing financing costs.

This expectation has aligned with what we have seen in Q1 2023; Industrials M&A has seen a significant fall in deal activity, against the backdrop of the economic uncertainty across H2 2022, with deal volume down 15% from Q4 2022 and 20% from Q1 2022.

However, there have been positive macroeconomic developments, such as tapering core inflation and upgraded growth outlooks, and corporate earnings have remained relatively robust. This has underpinned general positive public market momentum and in Q2 we are already starting to see an uptick in investor sentiment and M&A appetite through corporate announcements.

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