The M&A market had a huge first half of 2018, with total announced deal value reaching a record of $2.5 trillion – a 61% increase over the first half of 2017.  While overall value is up this year, deal volume slowed by nearly 4% from the same period in 2017.  This drop continues the trend, as deal volume at the end of 2017 had fallen over 17% from peak levels reached in 2015.  The story behind the record deal value amid lower volume is a spike in blockbuster deals between corporate heavyweights – especially in the healthcare and media industries.

In the middle market, private equity and debt continue to be drivers of deal activity.  Dry powder among private equity firms currently sits at an all-time high of more than $1 trillion.  Debt markets have continued to be accommodating to the M&A market, as leverage for middle market LBOs reached 5.9x in Q1 2018.

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Overall, the M&A market continues to see record levels of capital pursing a decreasing number of deals.  The result has been persistently high deal values and multiples, a trend we expect to continue through the remainder of 2018.

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