Strategic buyers take center stage in California M&A activity
Baker Tilly Capital, LLC recently released their California M&A update report, which highlights the middle market transactions in the region in H1 2023.
Here are some key takeaways from the report:
- The California middle market M&A landscape continued its downward trajectory in H1 2023, mirroring recent trends. Notably, both closed transaction numbers and aggregate disclosed values saw declines compared to H2 2022 and the broader five-year look-back period
- H1 2023 recorded a total of 44 closed middle market M&A transactions, marking a significant 30% drop from H2 2022 and an even more substantial 39% decrease compared to H1 2022
- The cumulative value of middle market M&A deals reached $4.1 billion in H1 2023. This contrasts with H2 2022, reflecting a sharp 47% decline and setting a new low for semi-annual totals from 2019 to 2023
- H1 2023 showcased the ascendancy of strategic buyers in California's M&A landscape, with 100% of closed transactions involving strategic buyers. This pronounced shift underscores their central role in shaping the M&A narrative
- Despite the overall contraction, sectoral analysis revealed intriguing patterns. The information technology sector retained its prominence, contributing to 40% of total transactions in H1 2023. Consumer discretionary, healthcare, and telecommunications services sectors followed, accounting for 16%, 11%, and 11%, respectively