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By: Andrea Farley, Nicholas Stawasz, Troutman Pepper

After an overheated 2020 and 2021, the U.S. economy is slowing down in the face of increasing uncertainty - and is taking the deal market with it. We expect 2022's slowing deal market to stay that way into 2023. As importantly, the time deals are taking to cross the finish line has slowed as well, which we expect to be a continuing trend next year too.

Deals are taking longer to close because today's market conditions are leading buyers, including private equity investors and strategic acquirers, to take more measured approaches to their deals, particularly with their legal, financial, accounting, tax, and IT due diligence. This is due in part to the increasing gap between buyers and sellers on purchase prices, as 2020's and 2021's valuations based on lofty EBITDA multiples are in the rear-view mirror for certain sectors, and the continued economic slowdown causes credit markets to tighten. Today more than ever, buyers (and their sources of financing) want to be sure that if they're going to make a strategic dollar investment, their due diligence has uncovered any possible red flags - and those red flags will not result in them overpaying for the deal.

As private equity investors and strategic acquirers are well aware, time kills deals. Traditionally, both types of acquirers have brought different strengths to the dealmaking table - based on how they operate and how they view the world - that......................

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