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Preliminary Numbers Show 2021 Record M&A Year

By Generational Equity

01/24/2022

Towards the end of 2021, S&P Global Market Intelligence released its 3rd quarter 2021 M&A review, and the data was remarkable. Here is how the analysts with S&P described it:

M&A activity continued its unprecedented run during the third quarter 2021 as total global announced transaction value increased 13.7% sequentially and 32.0% year over year to $1.170 trillion. The U.S. represented the largest M&A market, with the total of transactions jumping more than 40% year over year to $551.56 billion.

Think about that for a moment: U.S. M&A activity was up 40% through the 3rd quarter of 2021! Given the events of 2021, that is amazing to ponder.

And keep in mind that the busiest quarter in the M&A world is always the 4th quarter, as seller’s move quickly to close deals before year-end. As we have examined before, it is safe to assume that final 2021 numbers will reflect a record year.

Here is some additional mind-bending info from S&P:

The third quarter marked the fourth straight period in which the total announced value of global M&A activity topped $1 trillion. Before this streak, deal announcements had not crossed the $1 trillion threshold for three consecutive quarters, according to S&P Global Market Intelligence data that dates back to the 1990s.

Frankly, even though we knew 2021 was going to be a remarkable year, the fact that we had never seen 4 consecutive quarters over the $1 trillion mark is amazing!

Generational’s activity mirrors this trend. At the time of writing this post, our deal closings are up 60% over 2020 and we are on pace for our fourth record year in a row.

The eternal question on everyone’s mind is when will this all start to change? When will the momentum of record deals abate? No one can forecast future events, but two clouds loom on the horizon: Interest rate increases and changes in Federal tax policies. Individually either of these could put the brakes on deal demand, and combined even more so.

Because of the current froth in the market AND the potential slowing in 2023 for deals, we are encouraging every business owner we meet with to dust off their exit plans and make sure that they are prepared to participate in the strongest seller’s market we have seen in ages.

To learn more, call us at 972-232-1121 or visit our website and leave your confidential contact info and we will reach out to you.

If you would like, you can download and review the entire S&P report here:

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

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