New England regional M&A update: H2 2023

Introduction

Baker Tilly Capital, LLC’s New England regional mergers and acquisitions (M&A) update provides a recap of middle market transactions (i.e., deals with reported enterprise value between $10 million and $1 billion) with the target company located in any of the New England region states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island or Vermont.

Transaction activity

Middle market M&A activity in the New England region remained slow in the second half of 2023 (H2 2023). The number of announced transactions decreased relative to H1 2023 while the aggregate disclosed values of completed transactions increased relative to H1 2023.

There was a total of 26 announced middle market M&A transactions during H2 2023, a 21% decrease from H1 2023 and a 32% decrease when compared year-over-year (YoY) with H2 2022. The aggregate disclosed value of middle market M&A transactions in the New England region totaled $7.9 billion during H2 2023, a 58% increase from H1 2023.

Transaction valuations

Average disclosed enterprise value (EV)/revenue multiples were 3.9 times over the last five years. Note, no average EV/revenue multiples were disclosed for H2 2023. Average disclosed EV/EBITDA multiples were 16.7 times over the last five years. No EV/EBITDA multiples were disclosed for H2 2022, H1 2023 and H2 2023.

Transaction profiles

Of the transactions in the New England region during H2 2023, Massachusetts had the most activity with 20 transactions, accounting for 77% of the region’s total transactions. M&A activity in Massachusetts decreased by 13% compared to the 23 transactions announced in H1 2023. Connecticut and New Hampshire followed Massachusetts, with three and two announced transactions, respectively during H2 2023. Vermont and Maine had the fewest number of transactions announced during H2 2023, with 1 and 0 transactions, respectively.

Strategic buyers were most active buyer type in the New England region. During H2 2023, strategic buyers represented 100% of the region’s announced transactions.

Middle market M&A transactions in the New England region were concentrated in the healthcare and information technology industries during H2 2023, accounting for 42% and 23% of transactions in H2 2023, respectively. Industrials, consumer discretionary, financials and undisclosed, rounded out the balance, representing approximately 36% of the region’s M&A transactions in H2 2023.

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