April 24, 2025
Study: Private Target Deal Terms
SRS Acquiom recently released the 2025 edition of its M&A Deal Terms Study. The study analyzes 2,200+ private-target acquisitions that closed between 2019 and 2024 where SRS Acquiom provided services, valued at $505 billion. Here are some of the key findings from this year’s study:
– 2024 saw a 3x increase in “jumbo” transaction values ($750 million or more in upfront value) year over year, with about 20% fewer deals that had $100 million or less in upfront value.
– The median return on investment for 2024 deals remained the same as 2023 at 2.5x, albeit with a lower average year over year, and down from a median of 4x in 2022.
– The percentage of deals with a management carveout went down slightly to about 5%, but the sizes increased, indicating distressed deals remain a small part of the mix.
– 2024, like 2022, saw increased activity from financial buyers, including Private Equity, with strategic buyers remaining about as active as they were in 2023.
– 2024 saw a modest yet steady increase in all-cash deals (including deals with management rollovers), especially in the second and third quarters.
More generally, the study found notable seller-favorable shifts in deal terms such as earnout and indemnification provisions. Buyers did, however, hold their ground certain important areas, including “No Undisclosed Liabilities” reps.
– John Jenkins