Historically, the first quarter has been a slow quarter for deal-making. Overall deal volumes decreased 7% sequentially but were up 19% year-over year, making it the strongest first quarter deals volume since 2015. However, total deals value fell 16% sequentially and 44% year over year.
The most significant difference between this year's first quarter and last year's is that the risk tolerance for transformational deals has softened. Deals are now being evaluated in the broader context of capital discipline, with the emphasis on return on capital and free cash flow generation. This is likely to result in a high volume of deal-making for the rest of the year, but at lower values as we have seen in recent quarters.