The SMB M&A Pipeline: Q1 2023

We are thrilled to be launching “The SMB M&A Pipeline”, a new quarterly publication from Axial. The series surfaces a top of the funnel breakdown of the deal activity occurring on Axial’s platform. 

The aggregated metrics include quarterly deal volumes, financial and geographic characteristics, and pursuit rates, sorted by quarter and also by industry category.

All deal data is fully anonymized to protect the confidentiality of these transactions.

What Are Pursuit Rates?

“Pursuit rate” measures the rate at which Axial’s buy-side members register interest in a deal that an Axial sell-side member has invited them to consider. If NDAs, IOIs, and LOIs reflect the deepening progression of interest among acquirers on a given deal, the pursuit rate is one step higher in the funnel than the signed NDA. It offers insight into the forward deal pipeline and the initial interest level of prospective Axial buy-side members.

An Overview of Q1 2023

Quarterly volume of new deals confidentially marketed via Axial achieved a record high in Q1. California, Texas, and Florida continued to remain the top three states for deal volume.

Industrials, Food & Hospitality, and Consumer Goods ranked as the top 3 sectors for deal volume (see below data table) but ranked in the bottom 3 sectors for pursuit rates. Food & Hospitality experienced the highest annual growth in deal volume with a 74.31% increase compared to Q1 2022.

Healthcare and Technology ranked as the top 2 sectors for pursuit rates, but respectively ranked #6 and #4 for deal volume. Healthcare deal count grew 23.70% compared to Q1 2022, while the pool of Technology deals shrunk 1.45%. 

The Transportation & Logistics sector grew 60.26% in deal volume compared to Q1 2022, despite still ranking #4 and #5 in pursuit rate and deal volume, respectively.  

Below, we have created a set of industry-specific and overall deal activity tearsheets that lay out a complete breakdown of deal activity in Q1 on Axial. Feel free to share and incorporate the data into your materials as you see fit.

If you have feedback or ideas for how to improve “The SMB M&A Pipeline” quarterly report, please email: [email protected]. 

Enjoy the report!