North American M&A transaction volume remained flat while deal value increased quarter-over-quarter with overall activity on track to exceed 2023 levels, driven largely by the financial services sector. Strategic acquirers continue to play a significant role in deal-making, while Private Equity is gaining market share.

The recent declines in interest rates are driving heightened activity in lending markets, with banks driving competition to secure deals. The shift creates a more favorable environment for borrowers, encouraging greater participation across the market. As borrowing costs improve, Private Equity firms are expected to capitalize on the opportunity by deploying their record levels of dry powder, which have been strategically held back during periods of higher rates.

The market continues to show signs of recovery, with consecutive rate cuts by the Federal Reserve positively impacting M&A activity and the broader U.S. economy. Despite increased interest among acquirers, transaction multiples declined in the last quarter, but recent trends suggest that the M&A market is likely to continue a gradual path toward recovery through the remainder of 2024 into 2025.