The latest Equipment-as-a-Service (EaaS) Market Update from Houlihan Lokey reveals a nuanced picture for the sector in Q3/24. While the number of transactions dipped slightly compared to the same period last year, total deal value showcased robust growth, reflecting the evolving dynamics of the market.

Key Highlights:

• Decline in Deal Volume, Increase in Deal Value: Q3/24 recorded 28 deals, down from 32 deals in Q3/23. However, total deal value surged by 5.2%, signaling larger average transaction sizes as strategic and financial acquirers sought high-value opportunities.
• Balanced Acquisition Activity: The balance of deal activity between strategic and financial acquirers remained consistent. Strategic acquirers continued deploying cash reserves as part of roll-up strategies, while private equity (PE) firms actively supported growth for their portfolio companies through mergers and acquisitions.
• Supportive Economic Conditions: The current interest rate environment is expected to ease further, enabling EaaS companies to capitalize on acquisition opportunities. This trend, which began earlier in 2024, highlights a favorable climate for expansion.
• Strategic Goals Driving Deals: Acquisitions by companies such as Atlas Copco (Wilda) and Mizuho Leasing (Rent Alpha) illustrate a broader push among strategic players to enhance service offerings and expand geographic reach.

Market Outlook

The report underscores optimism for the sector, with a focus on strategic expansion and financial backing fostering growth despite external economic pressures. As the industry adapts to shifting market conditions, EaaS companies remain well-positioned to capitalize on opportunities for consolidation and innovation.