News & Resources
We are excited to present our Q3 Northwest Market Update. The Northwest experienced strong growth in terms of total capital invested into the area, indicating a strong outlook for the economically vibrant Northwest Region. This quarter's report features data and insights on transaction counts and trends in the NW region, an M&A market update specific to the gaming industry and a region spotlight on the Spokane County M&A market.
Deal Size Rises
During the third quarter of 2023, the Northwest Region (Washington, Oregon, Idaho, Montana and Alaska) saw a slight decrease in deals closed, with 141 deals completed. This dip in deal volume is consistent with past quarters as the mergers and acquisitions market continues to cool off from post pandemic highs. Despite the decrease in deal volume, the region saw a 58% increase in average deal size (capital invested) from Q2, with the average deal size rising to $39 Million. Deal size growth from Q2 to Q3 is mainly attributable to a weak comparison from the prior quarter as well as the rising cost of capital, which pushes financial and strategic investors to seek out higher quality targets with greater profitability and strong leadership teams. Another notable factor impacting the mergers and acquisitions market is record levels of dry powder (readily available capital) held by private equity firms, which peaked at $2.49 Trillion at the beginning of the third quarter according to S&P Global.
Total Capital Invested Expands
The Northwest also saw a significant rise in capital invested, with $1.18 billion in total capital invested in Q3 compared to $355 million in Q2. This spike is partially attributable to Brand Engagement Network, Inc.’s acquisition of DHC Acquisition Corp. in a reverse merger transaction for approximately $250M on September 7th. An expansion in capital invested illustrates a reversal in trends as total capital invested had fallen each quarter since Q3 in 2022. This increase in capital demonstrates the confidence that investors hold that the Northwest Region will continue to grow due to the presence of many attractive industries, a skilled workforce, and a strong economy. Additionally, the increase shows strong support for mergers and acquisitions as an investment strategy, even as private equity firms are forced to contribute more equity to buyouts and recapitalizations as interest rates rise and debt becomes more costly and difficult to obtain.
Contact Us
Led by a team of former business operators and executives who have built and sold companies, Alexander Hutton is a boutique, middle market M&A advisory firm that has completed 225 successful transactions. We offer a unique understanding of what it takes to run a business and an accessible team dedicated to client service. By running a high-touch, competitive transaction process for each of our clients, we are able to help them achieve their ideal outcome.
Connect with the team at Alexander Hutton and talk to us about the future of your company.