It is More Difficult to Get an M&A Deal Across the Finish Line in 2023, but Demand Remains Steady
Summary
• 2021, and to a lesser extent 2022 were record years in terms of both deal valuations and volume – but thats over, and 2023 poses unique challenges in terms of resources, financing, regulatory scrutiny, and stakeholder (especially employee) skepticism • Increased deal pressures now highlight the points-of-failure in deals, prompting providers to focus intensely on the early pre-deal stage or the later post-deal stage(s) (dragging the deal process out) to both ensure the investment narrative is sound and that it consistently delivers the promised value • A major breaking point in deals in 2023 is the human capital component, both on the labor law side (TUPE) and the talent retention side, so that deals become de facto workforce transformation projects • Advanced technology acquisition is still a prime driver of deals, especially generative AI, while advanced technologies are also tightening and sharpening the transaction process such as cloud-based data platforms, virtual data rooms for due diligence, or AR/VR for inspecting assets remotely • As M&A has become more difficult and expensive, a growing number of clients have turned to joint ventures as an "easier" middle step – at the peril of ignoring the complexity of creating and managing joint ventures, including the exit An important dimension to M&A in 2023 is the prevalence of middle market-focused or more targeted, tactical deals (e.g., add-ons), challenging professional services providers geared towards larger scale, more complex deals. The Pacesetter Advisory Council assessed dozens of providers to arrive at twenty-four Innovators recognized for their ability to help clients navigate an increasingly complex market environment. In this report, Law.com Compass Pacesetter Research evaluates the innovation in M&A services capabilities and offerings of the following providers: Absa, Accenture, AlixPartners, Alvarez & Marsal, Ankura, Axial, Bain & Company, BDO, Boston Consulting Group, Crowe, Deloitte, EY, FTI Consulting, Kearney, KPMG, L.E.K. For more information or the full version of the Law.com Compass Pacesetter Research series, visit https://www.alm.com/intelligence/pacesetter-research/. ALM delivers leading data, intelligence, insights, events, and audiences essential for growing businesses globally to over 7 million professionals.