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MARKET UPDATE

108 M&A transactions closed last month, 34.1% lower than the average monthly transaction count over the last ten years. As of December 31, M&A activity year-to-date is down 17.0% versus 2022. Cash on corporate balance sheets in North America remained stable at $2.3 trillion (USD). There was approximately $1.3 trillion (USD) of private equity dry powder, which represents approximately $2.6 trillion (USD) in latent acquisition capacity when debt funding is factored in. Global inflationary pressures and uncertainty continue to dampen investor sentiment and valuations.

Considering long-term private market M&A activity, our view is that we are currently experiencing mid-cycle conditions. The reported declines are driven primarily by peak M&A market conditions in 2022, rather than current market activity.

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VALITAS INSIGHTS

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