Sports enthusiasts can attest that there are few scenarios more thrilling than a fourth quarter comeback. And no NFL quarterback has led more fourth quarter comebacks than future Hall of Famer Tom Brady. A brief look at history would indicate that total U.S. deal volume and Brady have something in common: Completing a fourth quarter comeback.
In four of the last five years, total U.S. M&A deal volume in the fourth quarter has exceeded total deal volume in each of the preceding three quarters, respectively. Fiscal year-ends, budgeting cycles, bonus incentives, tax considerations, achievement of annual targets and the race to lock in financing before year-end are all factors consistently contributing to the uptick that often makes the fourth quarter the most promising in terms of total deal closures.
As business executives plan for the year ahead, the urgency to close before year-end is frequently fueled by a desire to project the wholistic operations of a company for the following fiscal year and beyond. Additionally, the aforementioned stakeholders are often compensated by way of performance-based incentives associated with a deal closure. From a corporate level, companies may be enticed to exercise certain tax-related advantages associated with a sale, or purchase, of a company before the New Year’s Eve ball drops.
Similarly, companies will push for achievement of annual targets where, naturally, the fourth quarter deadline creates a sense of urgency. For a varying degree of the aforementioned reasons, it is not uncommon to see a push for transaction finalization as quarters come to a close.
Sports enthusiasts, business owners and M&A executives alike all love the thrill of a fourth quarter comeback which, based on the total U.S. transaction volume for the month of October 2023, the fourth quarter of 2023 appears to be yet another case study in the fourth quarter comeback saga.
M&A market activity
Deal volume within the U.S. for October 2023 declined by 19.2 percent when compared to the same period in 2022. Recent deal volume within the U.S., however, increased by 15.2 percent for October 2023 when compared to the prior month.
The Northeast Ohio M&A market continued to see strong deal volume in October 2023, with deal volume increasing by 35 percent compared to September 2023. October 2023 saw several noteworthy transactions in the Northeast Ohio region, with Park Place Technologies, The Timken Co. and The Sherwin-Williams Co., all companies with a Greater Cleveland presence, completing acquisitions within the month.
Deal of the month
Align Capital Partners (ACP) announced the acquisition of Counsel Press Inc. from Gladstone Investment Corp. The acquisition allows ACP to expand its presence in professional business services by breaking into the legal services field.
Counsel Press Inc. is headquartered in New York and founded in 1938. The company supports attorneys and clients pursuing appeals in courts across all 50 states by providing tech-enabled legal process outsourcing generally focused on appellate services. Counsel Press prepares and files over 8,000 appeals annually while working with over 2,900 law firms (including 98 of the Am Law 100).
“As Counsel Press looks toward future expansion and evolution, we are thrilled to partner with the ACP team to help accelerate growth. Counsel Press is confident that our consultative approach, subject matter expertise and years of experience provides us with a great foundation to support legal proceedings on a larger scale,” says Scott Thompson, CEO of Counsel Press.
Sources: Company Websites, PitchBook, and S&P Capital IQ
David Shibley is an analyst with MelCap Partner, LLC, a middle-market investment banking and advisory firm. For more information on MelCap Partners, please visit www.melcap.com or email [email protected].