2023 M&A transactions evidenced three overarching themes: (i) a continuation of the trend from 2022 of a predominance of acquisitions by and sales to strategic buyers as buyers and sellers looked to grow enterprise value through acquisition vs. increasing debt or equity raises; (ii) downward price pressure due to high interest rates vs. prior periods; and (iii) buyers being extraordinarily more conservative and risk sensitive during due diligence, resulting in transactions taking on average 25-50% longer to close. With that said, sellers of solid businesses were successful in finding buyers and buyers looking for good acquisitions could get greater value. All told, it was clearly a buyer’s market in 2023.
Equity/convertible rounds remained consistent in the mix between priced rounds and convertible instruments, with lettered preferred rounds generally being more efficient in timing and successfully achieving their target raise. Non-priced rounds continued to dominate, including in some instances for companies that had previously raised priced rounds, reflecting sensitivity by both investors and issuers to enterprise valuation.
Click here for OlenderFeldman's 2023 Overview: OF Transactions Overview 2023
We hope this information on companies we represented as transaction counsel in 2023 is helpful insight into the types of companies and industries that are attractive to buyers and investors in the current business environment.
