The SMB M&A Pipeline: Q3 2024

Welcome to the Q3 2024 issue of The SMB M&A Pipeline. This quarterly series surfaces a top-of-the-funnel breakdown of the deal activity on Axial’s platform. The aggregated metrics include quarterly deal volumes, financial and geographic characteristics, and pursuit rates, sorted by industry category.

All deal data is fully anonymized to protect the confidentiality of these transactions.

Pursuit Rates

“Pursuit rate” measures the rate at which Axial’s buyside members register interest in a deal that an Axial sell-side member has invited them to consider. If NDAs, IOIs, and LOIs reflect the deepening progression of interest among acquirers on a given deal, the pursuit rate is one step higher in the funnel than the signed NDA. It offers insight into the forward deal pipeline and the initial interest level of prospective Axial buyside members.

An Overview of Q3 2024

Last quarter, we saw 3,075 deals come to market, marking a 30.19% year-over-year increase in overall deal flow, with all seven major industries experiencing growth compared to Q3 2023. Notably, Business Services saw a 53.85% rise, while Healthcare and Consumer Goods followed closely with 50.60% and 44.09% increases, respectively.

Deal Volume vs. Pursuit Rate

Despite Technology ranking 5th in deal volume, it leads in pursuit rate for the second straight quarter. Industrials ranked 1st in deal volume and 2nd in pursuit rate, demonstrating continued strong market interest.

Healthcare and Food & Hospitality exhibited contrasting trends: Healthcare ranks low in deal volume (6th) but high in pursuit rate (3rd), while Food & Hospitality ranks 2nd in deal volume but only 7th in pursuit rate.

Below are industry-specific and overall deal activity tearsheets that lay out a complete breakdown of deal activity in Q3 on Axial. Feel free to share the data into your materials as you see fit.

Want to receive articles like this directly to your inbox? Enter your email address below to subscribe to Middle Market Review.