Blackstone Says Deal Cycle Has Hit 'Escape Velocity' As IPO, M&A Activity 'Feels Like 2013' Again

Private equity giant Blackstone Inc. (NYSE:BX) said that the long-awaited recovery in global dealmaking is now firmly underway, with executives pointing to accelerating IPO and M&A activity following a multi-year freeze.

Deal Cycle Has Hit ‘Escape Velocity’

During the company's fourth-quarter earnings call on Thursday, Chief Operating Officer Jonathan Gray said, “This is an exciting time for Blackstone, with three powerful dynamics coming together,” pointing to the reopening of the deal cycle, rising investment tied to artificial intelligence and growing adoption of private markets across investor channels.

Gray said the firm is now seeing the resurgence it had been anticipating, following several years of subdued transaction activity. “IPO and M&A activity are accelerating, deal sizes are increasing, and sponsor activity is picking up,” he said.

According to Blackstone, global IPO issuance surged 40% year-over-year during the fourth quarter, including a two-and-a-half-fold increase in the U.S. alone.

The firm played a central role in this resurgence, having led the $7.2 billion initial public offering of Medline Inc. (NASDAQ:MDLN), which Gray described as “the largest IPO since 2021, and the largest sponsor-backed IPO in history.”

The offering was “extremely well received,” Gray said, noting that Medline shares traded up more than 40% on their first day.

Gray likened the current environment to the post-financial-crisis reopening of capital markets. “It feels like 2013–2014, where you had that four, five-year hibernation period, the markets reopened, and we took a bunch of companies public,” he said. “And that is the way it feels today.”

He added that the return of exits is already improving limited partner liquidity. “As they get capital back, as they get gains back, it makes it easier for them to allocate more capital to us,” he said. “It does get that flywheel going again.”

Stock Slides Following Q4 Results

Blackstone released its fourth-quarter results on Thursday, reporting $3.94 billion in revenue, down 5% year-over-year, compared to $4.14 billion, and ahead of consensus estimates of $3.70 billion.

Distributable earnings during the quarter stood at $2.2 billion, or $1.75 per share, up from $2.1 billion, or $1.69 a year ago, and ahead of analyst consensus estimates at $1.53 per share.

Shares of Blackstone dropped 2.62% on Thursday, closing at $142.94 and are down 0.55% overnight. The stock has a poor Momentum score in Benzinga’s Edge Stock Rankings, but scores well on Quality. It has a weak price trend in the short, medium and long terms.

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