Optimistic M&A Outlook for Q3 2024 Amid Low RWI Rates
As we enter Q3 2024, the M&A outlook remains optimistic. Deal flow has been steady and is picking up compared to the previous year. According to a recent report by Euclid Transactional (one of our largest trading partners), they received a record number of submissions during April and May.
While deal outlook continues to remain generally positive heading into the second half of the year, insurance rates have remained at all-time lows, making the use of Representations and Warranties insurance highly attractive for buyers. There continues to be excess insurance capacity in the marketplace as new insurers have entered the space, and industry veterans have dropped their rates to be competitive. Initial retention levels are also at all-time lows. As deal activity continues to gain momentum, insurance rates and retentions may increase in the medium to long term.
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