The Firmex Deal Flow Bulletin: Q3 2022

The Firmex Deal Flow Bulletin uses virtual data room activity to forecast the volume of deals for Q3 2022.

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  • Overall, 48% of advisors said they felt positive about the market for the coming quarter, and 18% said they were feeling negative.
  • Buyers and sellers are actively pursuing middle market M&A transactions, as measured by a rise in data room openings in the third quarter of 2022.
  • While plenty of diligence is taking place, amid political and economic uncertainty, fewer deals are closing and taking longer to do so. Success rates show that the number of firms that close at least three-fifths of the deals they start fell to 52% from 68% in January.
  • Deal valuations are coming down from their peaks. Prices, most advisors say, have fallen to “above average” from “very high” six months ago. Most think they will fall further. 
  • One-third of advisers said there is less debt financing available, and one-fifth said there was less equity capital.  
  • Renewable energy is the sector seeing the greatest increase in activity. The biggest decline is in real estate.
  • Asked to forecast volume over the next three months, advisors are split, with 32% predicting an increase, 21% a decrease and 39% no change. Six months ago, advisors overwhelmingly were predicting they would do more business in 2022 than 2021.

A New Forecast for Deal Volumes

Along with our forecast for deal flow in Q3 2022, The Firmex Deal Flow Bulletin presents readers with a glimpse of changes in valuations, financing availability, and success rates. 

Readers of the bulletin will come away with deal volume insights gained from knowledge of virtual data room activity, as well as a grasp of what current M&A advisor sentiment is for the market for the third quarter of the year.

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