After a sluggish start, the M&A market is poised for a strong second-half 2025 rebound. Key drivers include expanding deal pipelines, record private equity dry powder, and easing economic uncertainty. Year-over-year data shows significant increases in marketed deals across healthcare, business services, and consumer sectors, with buyers and sellers re-engaging confidently.
Private equity firms, holding historically high unspent capital, face pressure to deploy funds and generate returns after early-year slowdowns caused by tariffs and economic concerns. Improved financial conditions are expected to fuel a resurgence in PE-backed transactions across multiple sectors.
Favorable indicators — cooling inflation, potential Federal Reserve rate cuts reducing borrowing costs, and clearer policy direction following tariff negotiations — are restoring buyer confidence and supporting both strategic acquisitions and leveraged buyouts.
With strong deal pipelines, available capital, and supportive economic trends, the remainder of 2025 appears set for meaningful M&A acceleration, positioning the second half for robust dealmaking activity.
M&A Market Activity
In July 2025, U.S. deal volume experienced an increase of 6.5 percent from July of the prior year, and deal volume rose 20.7 percent compared to June 2025. With ongoing economic stabilization and improving market sentiment, M&A is seeing a resurgence in activity in anticipation of a strong close to the 2025 fiscal year.
The Cleveland M&A market experienced a strong July that resulted in 42.9 percent more transactions completed than in the same period in 2024. Northeast Ohio-based companies The McGowan Companies, National Safety Apparel Inc., Materion Corporation (NYSE: MTRN), and BIT Mining Limited (NYSE: BTCM) all completed acquisitions, while Pleasant Valley Corporation and Flexjet LLC both received minority investments in the month of July.
Deal of the Month
Advent International announced its acquisition of Cleveland-based LayerZero Power Systems, a provider of mission-critical power products for data center applications (static transfer switches and power distribution units).
Abhishek Chauhan, Principal at Advent, said, “LayerZero has emerged as a leader in one of the most attractive and fastest-growing segments of critical power infrastructure. Leveraging Advent’s deep sector insights, operational resources, and global reach, we see significant opportunities to expand the company’s manufacturing footprint, optimize operations through lean practices, and strengthen customer relationships.”
Read the full article in Smart Business.
Sources: PitchBook™, S&P Capital IQ, company websites, and public company filings.
Luke T. Hippler is an Analyst at MelCap Partners LLC, a middle-market investment banking advisory firm.
For more information on MelCap Partners, please visit www.melcap.com or email luke@melcap.com.
Originally published September 4, 2025
