The M&A market has been on a rollercoaster ride over the past few years. After the boom of 2021, followed by the slowdown of 2022-2023, dealmakers are navigating a new normal in 2025. With interest rates stabilizing, private credit expanding, and Texas becoming a top destination for investors, what does the future hold for M&A, capital markets, and business exits?
To get first-hand insights, I sat down with Greg Hext, Founder & CEO of Hext Financial Group, a unique firm that combines investment banking, CPA services, and wealth management under one roof. With a pulse on the latest deal trends, financing shifts, and Texas’ growing financial dominance, Greg shared his take on the current M&A landscape and what business owners, investors, and dealmakers should expect in 2025.
See full interview here
M&A in 2025: Is the Market Rebounding?
When discussing deal activity, Greg pointed out that Texas remains a hotspot for M&A despite market fluctuations.
“Dallas and Texas have been the hotspot for the last few years,” Greg said. “We consistently have phone calls from private groups across the U.S. saying, ‘I want to own something in Texas.’ The M&A business is very active right now—almost like drinking from a fire hose.”
One of the biggest drivers of deal flow? Baby boomer business owners looking to exit.
“We’re seeing a lot of boomers who are realizing this may be their last window to sell before the market shifts again,” Greg noted. “Some are facing health concerns, some are simply ready to retire, and others see strong valuations and want to capitalize before the next downturn.”
This generational shift is creating a wave of business sales, making 2025 a prime time for buyers looking to acquire established, profitable companies.
How Interest Rates & Tariffs Are Influencing Deals
One of the biggest concerns for buyers and sellers has been the impact of interest rates on deal financing.
“Interest rates being down is helping drive deal activity, but I don’t see them dropping much further,” Greg explained. “The Fed seems to want to keep things steady. That means businesses need to structure deals based on today’s reality, not on hope for lower rates.“
While rates are not as high as in 2023, they remain a factor in deal structuring. Buyers must be strategic in their capital stacks, balancing equity, private credit, and seller financing.
Tariffs: A New Wildcard in M&A
Another emerging concern is tariffs and international trade policies.
“Onshoring has been a big trend for a while,” Greg noted. “Manufacturers that used to rely on China and Vietnam are moving operations to Mexico and even back to the U.S. That’s why Laredo, Texas, is now the largest inland port in the U.S., with up to 40,000 rigs a day crossing the border.”
While tariffs have not yet had a major impact, Greg emphasized that supply chain due diligence is becoming more important in deals.
- Where are companies sourcing their materials?
- Are suppliers vulnerable to new trade restrictions?
- Can companies pass on added costs to customers?
For buyers, supply chain resilience is now a key factor in deal evaluation.
Private Credit vs. Traditional Banking: Who’s Financing Deals?
One of the biggest shifts in M&A financing has been the rise of private credit over traditional banks.
“Private credit has taken over the lending space,” Greg said. “Banks are becoming irrelevant in M&A financing. Frankly, they may have already lost their market share.”
Why Are Banks Losing Ground?
1️⃣ Stricter lending regulations – Banks face regulatory pressure to reduce risk exposure.
2️⃣ Exposure to commercial real estate downturns – Many banks are dealing with bad CRE loans.
3️⃣ Slower deal approvals – Traditional bank financing is slower and more restrictive than private credit.
Even major institutions like Blackstone and KKR are launching private credit funds to compete in the lending space.
“The big players have figured it out,” Greg said. “They know there’s more opportunity in private credit than in traditional PE right now.”
For business buyers, this means:
- More flexible deal structures
- Higher debt capacity
- Faster approvals compared to banks
However, private credit often comes with higher interest rates, making deal structuring more complex.
Texas Is Becoming the #2 Financial Hub in the U.S.
One of the most exciting long-term trends is Texas’ rise as a major financial center.
“DFW is becoming the second finance market in the U.S.,” Greg explained. “JP Morgan now has more employees in Dallas than in New York. Goldman Sachs is building a massive new campus downtown. Private equity firms are expanding here at a rapid pace.”
What’s fueling this growth?
- Lower taxes & cost of living – Compared to California and New York
- Corporate relocations – Major companies are moving HQs to Texas
- Diverse industries – Finance, tech, logistics, healthcare, and manufacturing are all thriving
- Central location – Easy access to global business markets via DFW Airport
The only missing piece? Venture capital.
“Dallas still lags in VC compared to Silicon Valley,” Greg noted. “That’s the next frontier—growing the startup ecosystem.”
How Business Owners Should Prepare for M&A in 2025
For business owners considering an exit, Greg emphasized the importance of being prepared before going to market.
Key Steps for Sellers:
- Get your financials in order – Ensure clean books and transparent reporting.
- Build a strong management team – Buyers prefer businesses that don’t rely on the owner.
- Know your EBITDA – Buyers care more about cash flow than revenue.
- Understand your deal structure – It’s not just about the sale price; terms matter.
“Sellers get fixated on sale price and forget how they’re actually getting paid,” Greg said. “Would you rather get $10 million upfront or $20 million over time? The deal structure can make or break your exit strategy.”
What to Expect for M&A in 2025
Despite some uncertainty, Greg believes 2025 will be a strong year for M&A.
Key Predictions:
- Private credit will continue dominating deal financing
- Business sales will remain strong due to baby boomer retirements
- Interest rates will stabilize, keeping capital markets active
- Texas will continue attracting investors and corporate expansions
“The environment is perfect for deals if sellers are prepared and buyers are strategic,” Greg concluded.
Final Thoughts: Is Now the Right Time to Buy or Sell?
If you’re a business owner considering an exit, 2025 presents strong buyer demand and competitive valuations.
If you’re a buyer or investor, expect higher competition for quality deals—but plenty of capital options to structure transactions.
Want to learn more? Visit JamesSackey.Marketing for more M&A insights, interviews, and deal-making strategies.
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