News & Resources

We are excited to present our Q2 Northwest Market Update. Despite the ongoing challenges posed by a rising interest rate environment, deal flow in the Pacific Northwest has demonstrated resilience, maintaining levels comparable to those observed before the pandemic. This quarter's report features data and insights on transaction counts and trends in the NW region and an insightful M&A advisory piece concerning the current positioning of stakeholders in the M&A markets.

Deal Volumes Stay Level

During the second quarter of 2023, 164 deals were completed in the Pacific Northwest region (Montana, Idaho, Washington, Oregon, and Alaska) with a median deal size of $25M. This figure reflects the continuous decline in deal count (-48%) from a peak of 318 deals in Q4 2021. Deal activity in the Northwest fell 26% (YoY), while the national activity fell 36% (YoY). However, it seems that deal activity is beginning to flatten out, with only a 3% decrease in deals completed between Q1 and Q2 of 2023. Despite the ongoing challenges posed by a rising interest rate environment, deal flow in the Pacific Northwest has demonstrated resilience, maintaining levels comparable to those observed before the pandemic. As is typical in the Northwest region, the majority of M&A activity this quarter was concentrated in Washington (50%), with Oregon providing the second largest proportion of deal activity (28%).

Smaller Transactions Take Center Stage

Q2 M&A trends in the Pacific Northwest region reflect a notable preference for smaller transactions, mirroring the national and regional patterns: an 80% decrease from last quarter’s median deal size of $125M. However, the sharp uptick seen last quarter can likely be attributed to a select few large-sized transactions that were completed. As current market conditions lead private equity firms to adjust their investment strategies, favoring smaller and more resilient businesses, the Pacific Northwest’s lower middle market has seen an uptick in interest and activity.

Businesses are now prioritizing key operational areas to successfully navigate the post-pandemic market. These priorities include accelerating digitalization efforts, establishing more agile and flexible supply chains, and identifying and retaining top talent. As digital infrastructure becomes increasingly complex and the availability of suitable talent becomes more scarce, businesses recognize that achieving these goals necessitates inorganic growth through strategic M&A. The region’s concentration of SaaS companies and supply chain/business services makes it a hotspot for both strategic and financial buyers seeking to tap into the region’s technological advancements and service-driven economy.

Follow the link above to the PDF of our full report which includes a WA county spotlight piece, a breakdown by State, and a commentary concerning current positioning of stakeholders in M&A.

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Led by a team of former business operators and executives who have built and sold companies, Alexander Hutton is a boutique, middle market M&A advisory firm that has completed 225 successful transactions. We offer a unique understanding of what it takes to run a business and an accessible team dedicated to client service. By running a high-touch, competitive transaction process for each of our clients, we are able to help them achieve their ideal outcome.

Connect with the team at Alexander Hutton and talk to us about the future of your company.