Texas regional M&A update: H1 2023

Navigating transitions and embracing new horizons in Texas M&A

Baker Tilly Capital, LLC recently released their Texas M&A update report, which highlights the middle market transactions in Texas in H1 2023. 

Here are some key takeaways from the report: 

• The Texas middle market M&A arena experienced a notable contraction in H1 2023, signaling a significant decline from the robust activity observed in the latter half of 2022
• H1 2023 recorded a diminished 48 transactions in the middle market M&A space, marking a substantial 50% decrease from the vigorous activity witnessed in H2 2022. This period saw the lowest count of middle market M&A transactions since H1 2022
• The cumulative value of middle market M&A transactions reached $6.6 billion during H1 2023. This marked a pronounced 32% decrease from the aggregate disclosed deal value of $9.7 billion observed in H2 2022
• Valuation metrics revealed intriguing shifts in H1 2023. While reported average enterprise value / Revenue multiples declined from the elevated levels of H2 2022 to more modest figures in H1 2023, the average enterprise value / EBITDA multiples experienced normalization
• Strategic buyers retained their pivotal role in the Texas M&A landscape, accounting for a substantial 90% of closed transactions with reported data during H1 2023, consistent with the preceding H2 2022
• The financials, energy, and materials sectors emerged as the most vibrant during the first half of 2023, each contributing 18% of the M&A deals announced. Additionally, the industrials and consumer discretionary sectors made their mark, constituting 15% and 11% respectively, of the announced transactions

Overall, the M&A activity in Texas is rebounding, with an increase in middle market transactions, higher average enterprise value/revenue multiples and average enterprise value/EBITDA multiples, and a diverse range of active sectors.

Get the full picture

For an in-depth look at M&A activity in Texas, download a copy of the Texas regional M&A update: H1 2023. The report includes: