Special Situations M&A Market Snapshot

Reflections on 2024 and Outlook for 2025

With geopolitical turbulence and economic slowdown, 2024 saw an increase in special situations M&A deal activity in private equity ─ with a slight lift in the second half of the year. Despite this uplift, market analysis suggests that both volume and quality still failed to meet investor expectations for distressed M&A opportunities.

The volume of special situations opportunities was lower than expected, particularly given the vast economic and political disruption, and numerous investors noted that many of the opportunities were simply too distressed and without viable turnaround plans to be a suitable turnaround transaction. Sectors heavily exposed to discretionary spend offered the most distressed mergers and acquisition opportunities in 2024, with investors highlighting higher levels of opportunity in automotives, retail and consumer goods.

Special situations private equity investors continue to hold their breath looking forward to 2025. We continue to expect an increase in special situations M&A opportunities – as with previous years – due to economic and financial market conditions, despite some increase in geopolitical certainty. Investors should remain wary of this gradual increase, with distressed M&A deal activity expected to be concentrated in certain sectors and driven by upcoming maturities and limited lender appetite to continue to support struggling companies.

This report aims to provide a concise reflection of special situations M&A from the last year, while looking forward at economic expectations and anticipating areas of distress for 2025. Pivotal insights to guide investors through challenges, complex and business-critical issues to deliver the optimal outcome.

Click here to download the full report