2025 promises to be a dynamic year for business growth and M&A activity in New Hampshire. By understanding the key drivers and challenges, companies can position themselves for success and navigate the future with confidence.
Economic recovery following the pandemic will continue to drive business growth and M&A activity in New Hampshire. As 2025 approaches, a variety of factors will contribute to increased deal flow and create opportunities in the Granite State.
Private equity and venture capital firms are increasingly targeting successful middle-market companies, including family and privately held businesses. Family businesses often experience succession planning challenges. These challenges create opportunities for buyers with funds to invest, such as private equity and venture capital firms with undeployed capital. Family businesses whose succession plans were delayed by the pandemic and its aftereffects welcome offers from these firms. Additionally, private equity and venture capital investments in local companies fuel growth across the state.
Our state is a hub for technological innovation and entrepreneurship. The U.S. Department of Commerce’s Economic Development Administration announced an investment of approximately $44 million in Manchester through ReGen Valley Tech Hub, a consortium led by the Advanced Regenerative Manufacturing Institute. The ReGen Valley TechHub project will help make New Hampshire a global leader in biofabrication.[1] The investment will not only create jobs but also attract innovative companies and investments to the region.
Across the country, investor confidence is rising. According to a survey conducted by the U.S. Chamber of Commerce, 57% of survey participants expect the economy to improve during the final three months of 2024 and the first quarter of 2025.[2] Although the outlook is positive, challenges will impact New Hampshire businesses and M&A activity.
Geopolitical tensions are a concern. Talk about tariffs and trade wars appears in the news. At the federal level, anticipated changes to regulatory regimes have caused uncertainty. Although the Federal Reserve recently lowered the federal fund rate, high interest rates and inflation slow deal activity. Locally, New Hampshire faces challenges relating to its workforce and housing stock. Our state is currently the second oldest state in the nation, and it is a net exporter of talent[3]. Shortages of affordable housing and significant workforce gaps will continue to need to be addressed.[4] Despite these challenges, the outlook for New Hampshire businesses and M&A activity remains positive.
Today’s M&A market is fast paced. As we look ahead to 2025, we anticipate that AI will revolutionize M&A transactions by empowering businesses to make more informed decisions and accelerate the deal-making process. To navigate challenges and maximize growth and success, companies would benefit from developing a clear M&A strategy. This involves identifying goals and building strong relationships with advisors, including attorneys, CPAs, and investment bankers or M&A advisors. It is crucial to consult with experienced advisors well in advance of any potential business sale or investment. Seeking guidance early can help prepare the company and the management team for a future transaction. By taking advantage of the expertise of experienced advisors, businesses can optimize their potential and thrive.
[1] See Press Release, July 2, 2024, U.S. Economic Development Administration.
[2] See Q3 2024 RSM US Middle Market Business Index, Middle market business conditions remain rock solid, September 12, 2024, U.S. Chamber of Commerce.
[3] See State of New Hampshire Workforce Assessment, August 2022, Updated April 2023, New Hampshire Department of Business and Economic Affairs and the NH Department of Business and Economic Affairs’ September 2022 report, State, County, and Municipal Population Projections: 2020-2050.
[4] See State of New Hampshire Workforce Assessment, August 2022, Updated April 2023, New Hampshire Department of Business and Economic Affairs.