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What is the M&A Sentiment for 2022?

By Generational Equity

02/14/2022

Towards the end of 2021, SS&C Intralinks partnered with Mergermarket to survey 300 global M&A dealmakers to find out current sentiment and COVID-19’s impact on the future deal environment, along with opportunities on the horizon. Here are a few of their key findings from the survey:

The M&A community’s spirits are high due to strong activity in the first half of 2021. Almost two-thirds of respondents expect M&A activity to increase over the next 12 months. Meanwhile, almost a quarter (24 percent) expect activity to increase significantly — highlighting the wave of optimism among global dealmakers.

COVID-19 has boosted dealmaker appetite; PE is leading the way. Over half (51 percent) of respondents say that COVID-19 has increased their dealmaking appetite — and 13 percent say it has increased significantly.

The Private Equity industry’s ambitions for next year make sense in the context of activity so far in 2021. According to Mergermarket data, a total of USD 453.3 billion worth of buyout deals were announced in Q2 2021, making it the highest quarterly deal value on Mergermarket record (going back to 2006). An H1 2021 deal volume of 3,168 buyouts, meanwhile, represented a 98 percent year-on-year increase.

So based on this survey, it appears that dealmakers are quite excited for continued record-setting M&A activity in 2022. The buyers we work with on a regular basis tell us the same. They see no abatement in 2022 assuming interest rates remain relatively low and new federal tax hikes are not enacted soon. If you would like to review the entire survey, you can do so here:

After a tumultuous first half of 2020, when the pandemic looked out of control, sellers and buyers worked together to create the strongest seller’s market in ages. Our business was up over 60% in 2021 and we anticipate another record year in 2022.

The key question every business owner must ponder right now is how do I take advantage of these trends and develop tactical and strategic growth plans that position my firm for optimal growth and profitability? Even if your goal is to exit this year, it is never too late to begin developing a “buyer ready” business.

A great place to start is by attending a Generational Growth and Exit Planning Conference. These are purely complimentary and designed by business owners for business owners. We have helped hundreds of business owners just like you optimize their eventual exit (we passed the 1,100 deal mark in October of 2021). Here is what a few of our clients have to say about the effectiveness of our process:

So, to begin your exit journey, no matter what your timing might be, please contact us at 972-232-1211 and we will introduce you to our process and explain why it is so successful.

Carl Doerksen is the Director of Corporate Development at Generational Equity.

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