Insights brought to you by our member Alexandre Maroufi, Vice President – Corporate Finance, Alantra
Macroeconomic Headwinds Reshape the M&A Playbook
1. Persistent Uncertainty Shapes M&A Landscape
The M&A landscape remains fraught with uncertainty, influenced by factors such as tariffs, inflation, regulatory scrutiny, and macroeconomic volatility. Recent U.S. tariff policies have introduced additional complexities, particularly affecting cross-border transactions. For instance, the implementation of a 10% global tariff on nearly all goods entering the U.S., including critical healthcare items, has raised concerns among international dealmakers. Moreover, the Trump administration’s approach to trade and regulatory policies has led to heightened caution among investors, with some CEOs expressing the need to “tighten their belts” in response to the evolving economic landscape.
2. Delays in Large-Cap Transactions
Large-cap and billion-dollar deals are experiencing delays as firms exhibit caution in launching major processes. Volatility in financing conditions and valuation disparities between buyers and sellers contribute to a more selective approach to high-profile deals. We might witness a pickup in M&A activity in the latter half of 2025.
3. Headwinds in Healthcare and Industrial Manufacturing
Healthcare is facing growing headwinds, not only from increased tariff exposure on imported medical devices and pharmaceutical components, but also from heightened regulatory uncertainty. Discussions around cost containment, potential policy shifts, and reimbursement changes are creating additional complexity for investors and acquirers.
Industrial manufacturing, meanwhile, is primarily impacted by tariffs and their downstream effects — including higher input costs, disrupted supply chains, and reduced export competitiveness. These factors are prompting valuation pressure and caution among both strategic and financial buyers.
4. Potential Pricing Pressure
We witness a growing decorrelation between public and private market valuations. While public markets are expected to recover from recent volatility, the rebound will take time. In the interim, private market sellers may struggle to justify premium valuations—particularly as publicly listed strategic buyers are constrained in pursuing acquisitions that would be dilutive to their own valuation multiples. This divergence is likely to sustain pressure on pricing in the private deal market.
Bright Spots: Sectors and Segments Driving Activity
5. Resilience in the Lower Mid-Market
Contrastingly, the lower mid-market demonstrates resilience, particularly in sectors less exposed to tariffs and global supply chain disruptions. Local targets with limited international exposure might command higher valuations, as their operations are less impacted by cross-border risks. Local or regional private equity firms will be well-positioned to compete in competitive processes, las they may have an edge over international buyers who lack a domestic presence.
6. Growth of Private Credit and Alternative Financing Models
Private credit continues to gain ground, with attention shifting to creative deal structures and alternative financing models that are reshaping the 2025 M&A playbook.
7. Sustained Interest in IT Services and Software
The IT services and software sectors continue to attract strong interest due to their recurring revenue models and limited exposure to tariffs and broader macroeconomic pressures.
8. Emphasis on AI and Operational Efficiency
AI and operational efficiency remain major themes across conversations at both the investment firm and portfolio company levels.
Opportunity in Volatility: Strategic Plays in the Current Market
9. Increase in Distressed and Carve-Out Opportunities
An uptick in distressed and corporate carve-out opportunities is anticipated in 2025, as number of international strategic buyers increasingly look to divest local operations that weigh on margins and demand disproportionate management attention. These non-core assets will become prime candidates for divestiture as corporates refocus on core geographies and higher-margin segments.
10. Pricing Opportunities for Financial Investors Amid Market Conditions
Several private equity firms perceive current market conditions as an opportunity to acquire targets at more favorable valuations. This trend is expected to influence pricing dynamics across mid-market transactions, as firms adapt to the evolving economic landscape.
About Alexandre Maroufi and Alantra
Alexandre is a Vice President at Alantra in New York. He is an international investment banker with M&A experience across New York, Paris, and London. In early 2023, he transferred to the New York office after spending five years helping to build Alantra’s presence in France.
Alantra is a global financial group with over 550 professionals across 20 offices in 18 countries. Its investment banking division specializes in advising mid-market companies, with deep sector expertise in Technology, Industrials, Healthcare, and Consumer.
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