Earlier this year, M&A activity was continuing at a record pace after 2024 finished with 714 deals for the year, an annual record by far. February, March and April all exceeded 60 transactions each, peaking in March with 69 deals and average 780 annualized deals across that three-month period. But we were a little surprised when dealmaking plummeted in May to 46 transactions, the lowest monthly total since February 2024. Looking at only U.S. deals, the decline has been steadier, going from 57 deals in March to 46 in April to 35 in May, the lowest domestic monthly total since September 2023.
Dealmaking is always cyclical, with waves of listings and closings ebbing and flowing. And we’ve consistently heard from brokers that the second half of the year will be when closings really take off. So, we’ll hold off on calling this spring dip in activity a trend.
But we’re nearly halfway through the year, and the sector is looking like it may not exceed 700 deals in 2025. We thought that may happen if we saw a bunch of portfolio deals consolidate what was previously 3, 4, 10 separate transactions in 2024 into single deals in 2025. That may be happening right now with some portfolio deals on the market or heading towards closing shortly. And if interest rates stabilize, or even drop slightly, things could really heat up this summer.
