The Future of M&A and Middle Market Banking: Insights from Amanda Foyt of Comerica Bank

M&A remains a dominant force in business growth, investment strategies, and economic expansion. As companies continue to explore opportunities for acquisitions and private equity firms deploy capital, the financial sector plays a critical role in facilitating these transactions. However, shifting interest rates, evolving deal structures, and economic uncertainty are shaping the way deals are structured.

To gain insights into the current M&A environment, capital markets, and middle-market banking trends, I sat down with Amanda Foyt , Vice President of Middle Market Banking at Comerica Bank. With experience in investment banking, commercial lending, and private equity, Amanda shared her perspective on how financing trends are evolving, how tariffs and interest rates are impacting deals, and why Texas remains a top market for M&A activity.

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M&A in 2025: The Market is Active but Selective

When asked about the current state of M&A in Texas, Amanda confirmed that the market remains highly active, particularly in add-on acquisitions rather than new platform investments.

"There’s been no shortage of activity," she noted. "In my portfolio and the private equity sponsors I work with, I’ve seen a heavy focus on add-on acquisitions. There has also been a delay in portfolio exits from middle-market private equity firms, meaning a lot of capital is still waiting to be deployed."

This aligns with industry trends, where private equity firms are holding onto companies longer, waiting for the right conditions to exit at strong valuations. However, Amanda emphasized that capital is abundant, and deal activity is expected to pick up in 2025 as firms look to deploy dry powder.

Another key trend she highlighted is the increasing competition for high-quality assets.

"With more capital sitting on the sidelines, private equity firms need to put that capital to work. We expect to see larger transactions and higher deal volume in 2025," she said.

This suggests that well-performing businesses with strong cash flow, sustainable growth, and solid management teams will attract strong buyer interest and competitive valuations.

The Role of Interest Rates and Tariffs in Deal Structuring

Interest Rates: Less of a Concern, More of an Opportunity

One of the biggest shifts in the M&A landscape has been how businesses are navigating interest rates. Rising rates created tight lending conditions, making leveraged buyouts (LBOs) and debt-financed deals more expensive. However, Amanda noted that interest rates are no longer stifling deal flow—instead, they are creating opportunities for lenders and buyers who can navigate the changing environment.

Find more insights on M&A in DFW here in the Dealmaker's Series hub.

"There was certainly some tightness in cash flow and leverage lending over the past couple of years, but we are now seeing middle-market companies more willing to consider new banking relationships to secure better terms," she said.

She also pointed out that some businesses are adapting by improving their capital structures.

"Most of my clients are positioned as market leaders within their sector, so they are able to pass on cost increases to customers. The ability to command pricing power is critical in evaluating middle-market M&A opportunities."

This reinforces the idea that businesses with strong market positioning and pricing power will have an advantage in deal negotiations.

Tariffs: A Growing Concern in M&A Transactions

While interest rates have become more stable, tariffs remain an area of uncertainty for M&A transactions.

"We haven’t seen a significant impact yet, but with new tariff policies being introduced, companies with international supply chains may be affected," Amanda explained.

She also noted that businesses involved in international trade should proactively assess potential risks.

"I will be participating in a CFO panel in March alongside Comerica’s foreign exchange team to discuss how companies should prepare for potential tariff impacts. We will be polling clients to understand what strategies they are deploying to mitigate risks."

For buyers and investors, this means that due diligence should include a deep analysis of supply chain vulnerabilities and the potential financial impact of new tariffs.

Financing Trends: How Private Equity and Banks are Structuring Deals

Alternative Financing and Seller Notes on the Rise

One of the biggest shifts in deal structuring has been the increased reliance on alternative financing methods.

"Sellers are more frequently including seller notes, earn-outs, and rollover equity in deal structures," Amanda observed.

This shift is largely due to higher interest rates and more conservative bank lending, which require creative solutions to bridge valuation gaps between buyers and sellers.

Key financing trends Amanda highlighted:

• More seller financing and contingent payments to align incentives between buyers and sellers.
• Cash flow sustainability is a critical factor in determining deal terms.
• Escrow components are making a comeback to protect buyers from post-transaction risks.

For business owners looking to sell, this means that understanding deal structures beyond the sale price is critical. The ability to negotiate favorable terms, reduce risk, and maximize payout over time is just as important as the headline valuation.

Why Texas is a Top Market for M&A

Texas has solidified itself as one of the top M&A markets in the country, attracting private equity firms, corporate buyers, and capital providers from across the U.S.

"We are unique," Amanda said. "Texas is experiencing massive corporate migration, expanding our asset class focus from traditional industries like oil and gas to emerging sectors such as technology, infrastructure, and data centers."

She highlighted several reasons why Texas continues to attract dealmakers:

• Business-friendly policies: No state income tax and pro-business regulations.
• Expanding industry diversity: Beyond oil and gas, Texas is growing in tech, logistics, healthcare, and finance.
• Corporate relocation: Companies are moving their headquarters and regional offices to DFW.
• Growing private equity and banking presence: More PE firms and banks are establishing Texas-based teams.

This diverse economic base ensures that M&A activity remains strong, even in fluctuating market conditions.

What to Expect for M&A in 2025

Looking ahead, Amanda believes that 2025 will be a year of continued deal activity, with more transactions closing and valuations remaining strong for well-positioned businesses.

Key predictions for 2025:

• More capital deployment from private equity firms sitting on record amounts of dry powder.
• Continued seller financing and alternative deal structures to accommodate shifting market dynamics.
• Texas will continue to lead in M&A volume, attracting more capital and corporate expansion.
• Companies with strong financials and pricing power will command premium valuations.

"Sellers who understand their financials, prepare in advance, and work with experienced advisors will have a strong advantage," Amanda emphasized.

Final Thoughts: Preparing for a Successful M&A Transaction

For business owners considering an exit, the M&A environment in 2025 presents significant opportunities—but preparation is key.

Key steps to maximize value in a sale:

• Strengthen financial reporting and cash flow management.
• Build a resilient management team that can operate without the owner.
• Ensure pricing power and competitive advantages to mitigate risks.
• Understand deal structures beyond just the sale price.

For buyers, expect strong competition for quality businesses, with capital providers continuing to favor well-run, profitable companies.

To stay informed on M&A trends and business strategies, visit JamesSackey.Marketing for more insights.