2023 is proving to be a challenging environment for deal making with buyers and sellers needing to navigate difficult macro-economic conditions, geopolitical instability, increased regulation, accelerating ESG pressure and the post-COVID reset. The volatility and outlook have resulted in the softening of M&A globally and increased caution from those buyers who are in the market.  In this review, we reflect on the direction of travel and share our thoughts on the practicalities of doing deals in the more demanding environment, looking at four key areas: 

  1. Financing - We summarise the shifting bank and acquirer dynamics, and highlight some alternative structures.
  2. Private Equity – We look at the opportunities for financial sponsors in the current environment.
  3. Deal terms and structuring – We consider ways of bridging valuation or funding gaps through more bespoke pricing structures or the creative use of vendor finance, joint ventures, and minority stakes.
  4. Regulatory intervention – We look at the latest patterns of increased regulatory intervention and how to manage them.

We expect some of these challenges to lift as we get further into 2023, particularly when debt markets find a new normal. However, in the short to medium term, there will be good opportunities for strategic buyers and financial sponsors who are able to navigate the more volatile landscape.

We hope this short summary will be of interest. Please get in touch if you would like to discuss any of our observations or suggestions in more detail.