Ep. 62 — How M&A Trends Could Explode in 2025

Welcome to the "Show Me The Way" podcast with David Seitter

In this episode, we take a step away from our usual format of hosting guests, as I, your host Dave Seitter, offer you a solo journey. As we near the end of 2024 and approach a new year, it's a perfect time to reflect on the M&A landscape of this year and glimpse into what 2025 has in store for us.

Ep. 62 — How M&A Trends Could Explode in 2025

As we move into 2025, it's time to reflect on the preceding year and forecast what the future holds for the M&A market, exit planning, succession planning, and business continuity planning. Here, originating from insights shared on my recent podcast episode, are a few key takeaways and predictions to guide your business strategies.

Reflecting on 2024

2024 was an intriguing year for the M&A sector, characterized by incremental progress and notable challenges. While financial acquisitions saw a 30% increase, strategic valuations remained stable. Observers largely anticipated the return of deal flow post-COVID, yet the market's strides were moderated by ongoing economic challenges and regulatory scrutiny.

Globally, M&A values rose by 15%, with frequent acquirers gaining a strategic advantage. My personal experience aligns with this positive trend, evidenced by an active year aiding expansion in industries ranging from manufacturing to construction.

Navigating Market Complexities

Despite the market's robustness, challenges persist. Some deals failed due to insufficient due diligence or unsecured financing. As we prepare for 2025, it's crucial to ensure thorough preparation and realistic expectations, particularly with the continued reliance on deferral techniques like seller financing and equity rollovers. These methods help distribute risk and will likely remain prevalent unless market conditions pivot significantly.

Interestingly, internal sales, such as ESOPs, emerge as promising opportunities. These transactions can incentivize employee retention, positioning companies for long-term success.

Valuation: An Ongoing Importance

An often-overlooked aspect of business planning is regular valuation. This annual exercise equips owners with an accurate understanding of their business's worth, aiding in informed negotiations and strategy development. This should be a priority as we anticipate continued market evolution.

Looking Ahead to 2025

Optimism is high for 2025, with projections of declining interest rates, increased IPOs, and potentially relaxed regulatory frameworks contributing to heightened activity in the business sector. This environment fosters a mindset ripe for innovation and expansion.

While political shifts may impact regulatory landscapes, the broader economic climate suggests a conducive backdrop for business growth. It is prudent to stay informed and adaptable, ready to capitalize on emerging opportunities.

As we embark on this new year, I encourage businesses to embrace proactive planning and remain flexible. The landscape is rich with potential, and with careful navigation, 2025 could prove a fruitful year for growth and success.

 

 

To reach out to Dave for advice or consultation, please visit www.davidseitter.com or email him at dseitter@spencerfane.com

 

Disclosure

This podcast is provided for educational purposes. It does not constitute legal advice and is not intended to establish an attorney-client relationship. The recommendations contained in this podcast are not necessarily appropriate for every individual or business. In determining the best course of action, business owners should consult with an attorney on their distinct circumstances.