Industrial Distribution M&A Pulse – Q3 2023

Q3 2023 – QUARTERLY M&A MARKET RECAP

• In Q3-23, M&A activity in the US Industrial Distribution sector slowed, with 77 transactions closed – a 22.2% decrease from the Q3-22. Looking at the trailing twelve months ending September 2023, a total of 352 deals were completed. This figure remains nearly unchanged when compared to 2019 pre-pandemic volumes of 356 transactions, signaling stabilization in the Industrial Distribution sector from the record volumes seen in 2021 and 2022.
• Q3-23 Global Industrial Distribution M&A deal volume trends closely align with those seen in the US, declining 32.4% compared to Q3-22. TTM Sep-23 global deal volumes also declined, however, similar to domestic activity, remained consistent with pre-pandemic levels. Despite slowed M&A activity during Q3-23, conditions remain viable for a market rebound with global PE dry powder at $1.4T, just 9.7% below its record high.
• Positive trends emerged in macroeconomic indicators during Q3-23. The US Industrial Production Index recorded a year-over-year increase of 4.6%. Additionally, as of September 2023, the US ISM Purchasing Managers Index (PMI), a key monthly gauge of economic activity in the US manufacturing sector, rose to its highest level since November 2022, reaching 49.0; whereas any value above 50 signals expansion.

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