M&A markets continue to reflect the impact of a volatile world in 2023, with value levels and volume falling steadily since Q4 2021. PitchBook projects this trend to continue over Q1 2023, with estimated volume for global deals in Q1 2023 coming in 21% below Q4 2022, and 36% lower than the market's height in Q4 2021. Simply, it is even more difficult in 2023 to execute an M&A strategy in terms of financing, data, regulations (including growing antitrust sentiment), shifts in global trade, talent strategy, taxes, real estate, etc. And this is to say nothing of the quality of assets available. But while more difficult and contentious, the client need for a nimble portfolio or asset strategy has not gone away. If anything, the strategic imperative for active business model management is even more important in a difficult year, and adversity also presents certain opportunities. Again according to PitchBook, while the frothy markets of the pandemic are likely over deals are still happening on par (volume, value) with pre-pandemic levels in 2019. The reality is that M&A is an important business tool.

That's not the same as saying that M&A is done well, however. Stats vary, but most agree that still, in 2023, most deals fail to achieve their value objectives. Data analytics, advanced technology, and a more structured, integrated approach to target sourcing and due diligence have had a noticeable impact, and much work has been done to improve the implementation of deal theses, but still – by most measures, more deals fail than succeed. Some providers have responded by extending their relationship with the client, helping them continuously reevaluate and tweak deal thesis models, months or even years after Day One. This, too, has proven helpful and some providers have developed elaborate post-deal engagement strategies like managed services and as-a-service offerings. These target key functional areas across the client corporate-scape, helping either with function and capacity or, increasingly, serve as longer-term interim services that help the client build up internal capabilities.

But what if the problem lies in the deal theses? Much of the technology and improved process management that are moving the needle on deal outcomes are also helping craft more precise, data-grounded deal theses, often generated through detailed scenario planning. Still, more deals fail than not, even in this environment. So are there unreal expectations about what M&A can achieve? So much energy in M&A and transaction practices has focused on improving the tactical aspects of executing deals, but are providers (consulting firms, multiservice firms, law firms, investment banks, etc.) presenting a realistic picture for clients of what is possible through M&A? Can market share, innovation, new technical competence, or entrepreneurship really be bought?