Q3 2023 Transaction Trends in Middle-Market Financing

This document is a report detailing transaction trends for Q3 2023, focusing on insights relevant to private equity sponsors and investors in the middle market. It outlines the relationship between the freight industry and broader economic indicators, noting that freight volumes often reflect changes in economic conditions, with historical recessions typically preceded by declines in freight activity. The report describes recent demand headwinds faced by the freight industry, including overstocked inventories and inflationary risks, contributing to a downturn in freight volumes since late 2022. It assesses the current M&A environment, highlighting discussions with BMO’s experts regarding market activity, strategic processes, and expectations for the year ahead, including anticipated deal flow and valuation concerns. Additionally, the report emphasizes the importance of freight as a key economic indicator while noting that current market conditions have led to a slowdown in pitch activity and adjustments in transaction dynamics within the M&A landscape.