Private equity mergers and acquisitions have soared in 2019 — to the highest level it’s been since before the 2008 global financial crisis. Experts predict that the buyout boom won’t stop anytime soon, especially since records show companies still holding about $2.5 trillion in cash. The high level of liquidity companies have directly affects the state of the M&A market, which affects how well other investments perform. So before you take on any new investments this year, here’s what you need to know about the M&A market. 

Large Aggressive Takeovers Will Continue

The build-up in capital has made companies get more aggressive with buyouts. The competition is high, and all companies want to make the best investments possible. Company leaders are using platforms to streamline the process. SourceScrub is an example of a platform that streamlines the process and includes scrubbed data information. By revolutionizing deal sourcing and tracking efforts, the platform saves time and increases efficiency. 

In the U.S., regulators have had more of a relaxed attitude. Because of this, the takeovers themselves are becoming larger and larger. In fact, the Department of Justice recently approved a merger between Sprint and T-Mobile, which will make the company the largest cell phone carrier in the country.

Already in 2019, four giant equity deals exceeded $10 billion in size, which matches the total number of megadeals in all of 2018. This includes Blackstone’s $18.7 billion acquisition of Singapore-based GLP’s U.S. warehouse portfolio — the largest real estate deal ever. It also includes EQT’s $10.1 billion acquisition of Nestle’s skincare line, and Digital Colony Partners and EQT’s purchase of Zayo Group, which was a $14.3 billion acquisition.

Upswing in Middle-Market and Lower-to-Middle-Market Companies M&A Coming Soon

Baby Boomers in the U.S. own 2.34 billion businesses, and many are getting ready to retire within the next five years. This means they’re ready to start transitioning ownership of their companies. Basically, Baby Boomer-owned businesses acquisitions are an M&A trend that will stick around for several years.

In some cases, companies are passed down to future generations of the family, but that’s not always the case. Many GenXers and Xennials are settled into careers or own businesses of their own, so they may not be interested in taking on the additional responsibility of running the family business. Because of this, many Baby Boomers are being forced to either sell their business, transfer it into a worker-owned business model, or close the doors for good — so you can expect a lot of middle-of-the-road acquisitions coming in the next few years.

M&A Activity Is Expected to Remain Healthy in All Sectors

Merger and acquisition activity has increased in all sectors throughout 2018 and the first half of 2019, and it’s expected to remain healthy. This is thanks to the large amounts of equity businesses are still holding. The higher levels of liquidity give companies more money to invest. And because the economy is in a low-growth cycle, investing in stocks won’t give them as large of a return as an acquisition. 

Technology and healthcare are the two top sectors to watch though. They both have high levels of activity that aren’t slowing down. In fact, the upswing in activity in the technology sector spans all different company types. Of course, the industry disruptors and pure-play tech companies are seeing constant activity, but traditional companies are also looking to acquire tech companies. Many traditional companies are looking to modernize, and acquiring a good tech company is a great way to get started.

With a cash pile of $2.5 trillion just waiting to be spent, companies won’t stop searching for good investments any time soon. You can expect to see high-levels of activity throughout the M&A market, at least until the large fluctuations in business liquidity start to slow down.