The Firmex Deal Flow Bulletin: Q4 2023

The Firmex Deal Flow Bulletin uses virtual data room activity to forecast the volume of deals for Q4 2023.

  • Merger advisors are more optimistic about the pace of their business than they have been since the beginning of 2022. In our October 2023 survey, 59% of advisors expect deal volume to increase over the next three months, a big jump from 42% predicting an uptick in volume in the July survey.
  • A plurality (40%) of advisors said their volume increased in the third quarter, while a quarter said their business slowed.
  • The factors that are most encouraging dealmaking are the profitability and growth of sellers and the state of the labor market.
  • The number of advisors who predict that deal valuations will fall (42%) is the lowest in 18 months, and those who expect valuations to increase (24%) is the highest it’s been in the same period.
  • There is a growing use of earnouts and other contingent compensation in deal structures. In this survey, 55% of advisors said these terms have become more common. 

A New Forecast for Deal Volumes

The Firmex Deal Flow Bulletin uses a machine learning model to forecast the volume of deals for Q4 2023, based on virtual data room activity, economic indicators and data from Firmex’s quarterly survey of middle-market M&A practitioners.


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