€180BN BUSINESS LOGIC OF CROSS-BORDER M&A FOR MID-SIZED FIRMS

The total value of global cross-border mergers and acquisitions involving mid-sized companies rose to €180 billion last year – a sharp increase after a post-Covid slump.

The average deal value in the sector was €50.6 million in 2024, which is higher than each of the past six years except 2021 when there was a short bounce after the pandemic.

The cross-border mid-market segment outperformed the total M&A market last year in terms of volume and growth in the average value of deals.

Financial buyers were behind four-out-of-ten acquisitions in 2024, a proportion that edged up on the 2023 position and reflects the continuing interest of private equity and venture capital.

European deals are particularly popular with private equity houses as mid-market companies in Europe deliver the best internal rates of return.

The findings are from the latest edition of Moore’s Compass Report which focuses on transactions involving companies valued between €10 million and €200 million.

The other main findings:

• There were 36,442 M&A deals completed last year and cross-border transactions accounted for 33% of the total.
• Average deal size in the cross-border mid-market was €50.6 million in 2024, almost 7% higher than the €47.9 million average for 2019-2024.
• 61% of all cross-border deals took place in the mid-market.
• Sustainability as a driver of deals almost doubled last year in cross-border mid-market M&A, while it stagnated or dropped in importance in some other sectors.
• Almost 50% of cross-border mid-market deals involved acquirers from North America, a significant jump from 12 months previously.
• Metals and metal products firms feature in the top five industries involved in cross-border mid-market for the first time.
• IT and healthcare remain among the most active sectors for cross-border mid-market M&A, with average deal values increasing compared to 2023.

The Compass report is a unique analysis of M&A activity since 2019 produced by Moore Global Corporate Finance in partnership with Vlerick Business School in Belgium.

The report confirms that cross-border deals remain attractive, even though they can be more complex to complete and require multinational teams of advisors to negotiate territorial differences in regulatory and financial regimes.

“M&A is a powerful strategic tool that derives a major part of its added value from anticipating market evolution and correct timing,” says Philippe Craninx, chairman of Moore Global Corporate Finance.

“This fifth edition of our Compass report gives us a detailed understanding of what is driving deals and we see different patterns emerging in the US, UK and continental Europe.”

Kerstin Fehre, professor of strategy at Vlerick, adds: “Our analysis reveals that the cross-border mid-market segment outperformed the total M&A market last year in terms of volume and growth in the average value of deals. We see that this part of the corporate finance sector follows its own logic and seems to be more resilient than other parts of the M&A market.”

Metal and metal products emerged as one of the top five “hot” sectors in the cross-border mid-market over the past year. The average deal value was €57 million, just behind banking, insurance and financial services and reflects growing demand for the rare earth minerals, the essential raw materials in the production of silicon chips that power our digital world.

In terms of volume, IT and healthcare continue to lead the way and accounted for almost half the total number of deals. IT was the focus of one-in-three transactions and the average deal size was €43.3 million. There were significantly fewer deals in healthcare but the average transaction value was higher at €52.9 million.

Given the rise of geopolitical tensions, it is unsurprising that Australian companies related to metals and mining are high on the target list of international buyers. Almost one-third of US acquirers are focused on buying Australian businesses although they also showed growing interest in China, India and Israel – countries that all contain hi-tech hotspots.

In Europe there is interest in Australia as well, although companies are more focused on seeking out targets and doing deals within Europe. French, German and Luxembourg businesses were among the top five acquirers of European targets.

Meanwhile, almost 25% of acquisitions made by British firms were in the US, a much higher proportion than the overall European average.

Within the 12 countries covered by Moore Global Corporate Finance, British companies were involved in twice as many deals as second-placed France but it was also the top destination for acquirers. The total value of UK acquisitions was €11 billion but sales were marginally higher at €11.36 billion.

The Compass report gives rise to cautious optimism that momentum will continue to gather in 2025. However, fear of economic slowdown in the US and contraction of world trade will play on the minds of business leaders as they consider their next strategic moves into new territories.