GCG’s Q3 2023 Middle Market Update provides an overview of the latest trends in the market, including the recent performance of select sectors and the state of the middle market M&A environment.
Key findings include the following:
- During the past 12 months, Greenwich Capital Group’s middle market index has underperformed the S&P 500 considerably. The S&P 500 is up 16.6% over this period, while the middle market is down 12%.
- Unlike prior quarters, there have been a couple of industry groups in the middle market that finished in positive territory.
- Aerospace & Defense (up 4.2%) and Business Services (up 2.5%) are both positive results compared to prior quarters.
- Trading multiples in the middle market continue to contract. While the reduction in multiples is not that significant, they do reflect a higher interest rate environment with a lot of economic and macro uncertainty.
- M&A volume and values in the middle-market are up slightly in the 3rd quarter. This is a direct result of more deals coming on line late in the first quarter and 2nd quarter of 2023. We expect to continue to see an increase in deal activity during the 4th quarter and into 2024.
- The most active sectors in middle-market M&A during the third quarter were: 1) Industrials, 2) Health Care, and 3) Information and Technology. Consumer-based deals saw the sharpest drop from last year at this time.
Click here for the full update.