The world of M&A has experienced a dynamic shift over the past few years. After the highs of 2021, the market saw a slowdown in deal activity, largely due to rising interest rates, inflation, and general uncertainty. However, as we move deeper into 2025, the landscape is evolving yet again.
To gain a clearer picture of the M&A environment, financing trends, and Texas’ role in the market, I sat down with Oliver Cone, Senior Vice President at Bulkley Capital. In this interview, Oliver shared insights on deal flow, financing trends, and the unique strengths of the DFW market. Below, we’ll explore some of the key takeaways and what they mean for buyers, sellers, and investors in 2025.
See full interview here
M&A in 2025: Cautious Optimism Remains
When asked about the current state of M&A, Oliver described it as a continuation of a trend seen over the past few years—cautious optimism. While 2024 saw a rebound in deal activity, it wasn’t the surge many in the industry had expected.
“The last several quarters, there’s cautious optimism,” Oliver noted. “2024 was pretty good, but it wasn’t quite the huge return to volume that everyone was hoping for after two years of declines since 2021.”
This sentiment reflects a broader industry trend. While private equity (PE) firms and corporate buyers have ample capital to deploy, uncertainty surrounding macroeconomic factors has made them more selective.
But one thing remains clear—Texas, and particularly DFW, continues to be a prime destination for M&A activity.
Texas: A Prime Market for Business Sales
DFW is fast becoming one of the top financial hubs in the U.S., second only to New York in deal volume and private equity activity.
“There’s a lot of quality buyers here in Texas,” Oliver explained. “You see both private equity and credit and banks setting up shop in Dallas or in Texas that weren’t here before.”
Why is Texas such a strong market for M&A? A few key reasons:
- Business-Friendly Climate: No state income tax, pro-business policies, and lower costs compared to coastal markets.
- Corporate Migration: Major corporations and PE firms are relocating headquarters and opening regional offices in Texas.
- Diverse Economy: Historically known for oil and gas, Texas now boasts strong sectors in healthcare, tech, logistics, and financial services.
- Skilled Workforce: The state’s rapid population growth means companies have access to a strong talent pool.
For business owners looking to sell their company, this environment means higher buyer demand and competitive valuations—especially for businesses with strong financials and growth potential.
The Role of Interest Rates and Tariffs in 2025 M&A
One of the biggest headwinds in M&A has been interest rate fluctuations. Over the last two years, rising rates created uncertainty, slowing down deals as buyers hesitated.
“Uncertainty kills transaction activity,” Oliver said. “Financial markets don’t like uncertainty. When interest rates kept climbing, no one knew where they’d stop, which made it hard to plan deals.”
However, 2025 has brought greater stability. Rates have leveled off or are declining, creating more predictable financing conditions. Buyers now have a better sense of how to structure transactions, which is expected to increase deal activity in the coming months.
Tariffs: The New Unknown in M&A
While interest rates have stabilized, tariffs are emerging as a new uncertainty in the market.
“These threats of tariffs—just the idea of them—create uncertainty,” Oliver explained. “I wouldn’t be surprised if diligence questions start to focus more on supply chains, sourcing, and pricing power.”
Buyers and investors are beginning to ask questions such as:
- Where are your products sourced?
- What impact would tariffs have on your supply chain?
- Can your business pass additional costs to customers?
For sellers, this means preparing detailed answers and demonstrating pricing flexibility will be critical when attracting buyers.
Private Credit vs. Private Equity: Who’s Financing Deals?
One of the biggest shifts in M&A financing has been the rise of private credit as a dominant force.
“Private credit has become a very flexible and supportive tool for private equity buyers,” Oliver said. “When traditional banks were pulling back, private credit stepped in with more flexible terms.”
This trend has reshaped deal financing, particularly in the lower middle market.
- Traditional Banks: More conservative, lower interest rates but stricter lending requirements.
- Private Credit: Higher interest rates, but more flexible terms and easier approval processes.
- Alternative Financing: Mezzanine debt, revenue-based financing, and other creative capital solutions.
While banks are slowly re-entering the lending market, private credit continues to dominate, offering financing solutions that enable deals to move forward despite economic headwinds.
DFW’s Growing Role as a National Financial Hub
One of the most exciting developments in Texas’ economy has been its emergence as a major financial hub.
Oliver pointed out that more financial institutions—including private equity firms, investment banks, and credit funds—are establishing offices in Dallas.
“We’re seeing banks, credit funds, and PE firms from out of state setting up shop in Texas. It tells you this is a good place to be raising capital,” he said.
A few key reasons why DFW is attracting financial firms:
- Lower cost of operations compared to New York or California
- Proximity to major industries and corporate HQs
- Highly skilled workforce and talent pipeline
With corporate migration increasing, DFW is well-positioned to compete with Wall Street as a deal-making hub.
What to Expect for M&A in 2025
Despite recent challenges, Oliver remains optimistic about the future of M&A—especially in Texas.
“As we move through 2025, we’ve got a great climate for M&A,” he said. “Well-performing businesses, a lot of capital, and plenty of quality buyers. The question is whether sellers will finally take advantage of the market.”
A few predictions for the remainder of 2025:
- More deals closing as interest rate uncertainty fades
- Buyers focusing on EBITDA, pricing power, and supply chain stability
- Continued growth of private credit and alternative financing
- Texas solidifying its role as a top M&A destination
Final Thoughts: Should You Buy or Sell in 2025?
If you’re a business owner considering an exit, now may be the time to capitalize on strong valuations and buyer demand.
If you’re an investor or acquirer, expect more competition for high-quality businesses, but flexible financing options should keep deals flowing.
Interested in more insights? Visit JamesSackey.Marketing for more interviews, market analysis, and M&A strategies.
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