Citizens Financial Group officials maintain the financial institution’s Citizens’ 2023 M&A (mergers and acquisitions) Outlook reflects optimistic company performance expectations and desired growth.
The survey findings stem from 400 respondents representing domestic middle-market businesses possessing $50 million to $1 billion in revenue, in addition to as well as private equity (PE) firms active in the acquisition and sale of domestic companies in the same revenue range.
Represented industries within the survey include aerospace, defense, and government services; business services; consumer; gaming, lodging, and commercial real estate; healthcare; and transportation and logistics, officials noted.
“Companies exited the pandemic era with a newfound resilience and, in many cases, better finances and more experienced management,” Citizens M&A Advisory Head Jason Wallace said. “When the macro conditions normalize, we see a pipeline of buyers and sellers eager to return to the market.”
According to the analysis, over 80 percent of companies and firms noted they believe 2023 company valuations would be stable or higher than last year, with companies and PE firms sharing nearly identical views of valuations for future years.
Although acknowledging persistent economic challenges, the survey showed management teams expressed they are looking to M&A as the primary growth driver for their companies, rather than organic growth – adding among middle-market company buyers, growth serves as the top reason for acquiring a company.
The survey findings showed 62 percent of buyers named growth as their M&A motivation while sellers pointed to growth as the main motivation – with 35 percent indicating they seek a sale because of strategic growth opportunities.