The mid-market leads the M&A recovery in a more selective environment | Capital & Corporate

Mercantil partners David González and Álvaro Mateo took part, alongside Guillermo Ferré from Kartesia, in an interview published by Capital & Corporate, where they analysed the evolution of the mergers and acquisitions market in Spain and the key factors driving its recovery.

The report highlights how the mid-market has established itself as the main engine of M&A activity amid macroeconomic and geopolitical volatility. After a cautious start to the year, activity has picked up during the second half, driven by funds’ growing interest in medium-sized companies with recurring cash flows and resilient business models.

According to the interviewees, the market remains highly selective in its transactions, prioritising the quality of assets, financial soundness, and operational value-creation potential over transaction volume. Hybrid structures — combining debt, equity and earn-outs — have become an effective tool to close deals in an environment where the valuation gap between buyers and sellers persists.

The analysis also underlines the trend towards bilateral processes and smaller transactions, as well as the increasing relevance of build-up strategies and secondary deals, reflecting a more disciplined market focused on sector consolidation.

In terms of financing, both banks and direct lenders continue to show strong appetite for deal funding, although debt costs remain high, forcing the design of more flexible and sustainable financial structures.

The interview concludes by stressing that the recovery of M&A will depend on macroeconomic and geopolitical stability over the coming months. In this context, the mid-market reaffirms itself as the space where private equity funds can generate tangible and sustainable value, leveraging professionalisation, operational efficiency, and the consolidation of leading companies in their sectors.

See interview