Private Equity M&A Report 2022
Welcome to the 2022 edition of our annual review examining deal terms and trends in the M&A and private equity markets. For the fourth year running we are delighted to work alongside Pinsent Masons and Howden M&A to pool our deal data, which we believe (as with previous years) provides the most comprehensive analysis of UK mid-market transactions available for review by buyers and sellers alike. We hope it continues to prove useful in assisting benchmarking on what constitutes ‘market practice’.
In our 2021 report we commented on high levels of deal activity after an initial period of uncertainty as the world was gripped by the pandemic and lockdowns. Indeed as last year’s report was being finalised the world had been subject to further lockdowns and how this would impact on M&A and PE activity for 2021 was unclear. As it was, the acceleration in deal activity seen towards the end of 2020 continued into 2021 and the global M&A markets had a record year! This was largely driven by abundant liquidity, a backlog of transactions from a pandemic disrupted 2020 and increased investor confidence driven by the global vaccine roll-out.
The UK M&A market reflected these broader global trends with private equity having a particularly strong year. Certain assets in sectors less impacted by the pandemic attracted some of the highest valuations and the most aggressive deal processes. Auctions were often very competitive and fast resulting in investors focussing their attention on competing aggressively on a far smaller number of assets where they had real internal sponsorship or a (so called) ‘angle’.
Sectors seeing high levels of activity included technology, financial services, life sciences and healthcare and “digital” retail and consumer. Indeed sectors that were not reliant on physical presence were well placed to take advantage although some of the most successful businesses during the pandemic are now finding previous high demand for their products or services cooling off slightly and uncertainties exist around post-pandemic trends, how they will impact the sustainability of longer-term revenue and earnings growth. It will be interesting to see how these businesses fare.
Click here to download your full copy of our Private Equity M&A Report.