THE MOMENTUM CONTINUES
2022 M&A
OUTLOOK
A LOOK BACK
2021 WAS A RECORD YEAR FOR M&A
2021 saw the highest total deal value in history,
topping more than $5 trillion
Strategic M&A is reaching its highest value in 6 years
In nearly all sectors, strategic M&A multiples are at
an all-time high
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2016
2017
2018
2019
2020
2021
400
600
800
1,000
1,200
1,400
1,600
200
0
0
NUMBER OF DEALSVALUE OF DEALS US$BNNUMBER OF DEALS
VALUE OF DEALS US$BN
GLOBAL M&A ACTIVITY - QUARTERLY
DATA FROM MERGERMARKET
A GLIMPSE
OF THE
ROAD AHEAD
64%
of 300 top dealmakers
believe that M&A
activity will increase
in the next year
2022 IS EXPECTED TO
CONTINUE ON A DEAL-MAKING COURSE DUE TO:
Concerns around changing fiscal policy & regulations
Ongoing supply chain issues
Competition from investors sitting
on a ton of dry powder
Global economic growth
ACQUISITIONS ARE EXPECTED TO FOCUS ON:
Technology needed by non-tech companies to
improve digitalization & cybersecurity
Purchases that help to diversify
or improve supply chains
Bolstering data analytics capabilities
Healthcare solutions that
improve the efficiency of care
Financial tech solutions such as
digital banking and payments
IMPACTFUL GLOBAL ECONOMIC POLICIES INCLUDE:
Infrastructure plans in the U.S. to allocate trillions of
dollars to a range of priorities
The EU Recovery Bill and Green Bill focusing on
research and innovation, digitization, modernization
and recovery
Tightening monetary policy in Latin America and
varying fiscal support in Asia
INTEREST RATES ARE EXPECTED
TO RISE IN THE US:
The Federal Reserve projects
three rate hikes in 2022
Three more increases are foreseen for 2023
Two more increases are foreseen for 2024,
pushing the rate to 2.1% by the end of 2024
The more interest rates rise, more pressure
on the cost of capital will be on multiples,
and they will start to decrease
THE
TECHNOLOGY
SECTOR
November 2021 saw
the highest sector deal
announcement and
the most aggregate
technology deal values
In almost every week of 2021, private equity
announced a technology transaction over $1 billion
78%
57%
22%
Notable Optimism
of 300 global
dealmakers expect M&A
tech deal volumes to
increase through the
first half of 2022
expect average
values to increase
identified a need to
scale to ‘increase
competitiveness’ as the
leading factor driving
their M&A strategy
of corporate
respondents are
considering a SPAC
transaction in 2022
of private equity
respondents are
looking to close a SPAC
transaction in 2022
Eyes on SPACs
49%
57%
of private equity
respondents
prefer high-growth
companies
of corporate
respondents
favor high-growth
companies
would prefer to acquire
mature companies that
are over five years old
Targeting
High Growth
75%
46%
26%
THE
HEALTHCARE
& MEDTECH
SECTORS
In 2021, there were 2,304 deals worth a $624.6 billion
Physician medical groups saw more than 400 deals
Hospitals saw more megamergers in Q4 of 2021
Biotech acquisitions in the $5-15 billion range are
expected through 2022 as companies try to fill gaps
in future pipelines
The medical device sector saw $85 billion in deals in
2021, activity that’s expected to continue
In 2022, deals could face more scrutiny and longer
review times from regulatory agencies
Healthcare M&A
surged in 2021,
growing 56% from
November of 2020
TRENDS DRIVING DEALS IN 2022
Deal activity among government
and health plans in the US
More deals in the home care market
More deals in behavioral care
Systems investing in manufacturers
to ensure continuity in resource
and income flows amid supply chain issues
Health systems continuing to expand
to capture more of the care continuum
Digital health consolidation impacting patient
engagement dynamics
THE MEDTECH SURGE
Deals in the medtech space have also hit record levels
The first half of 2021 alone reached a combined $31.5
billion in value
Players in the space will continue to focus on rapid and
highly competitive growth strategies
THE MEDIA
& TELECOM
SECTOR
That’s a 27% increase over the previous year
The value of deals in the sector
totaled a record $233 billion
Dealmakers expect 2022 to sustain
a high level of M&A deal volume
804
deals were announced
in the media & telecom
industries in 2021
TRENDS DRIVING DEALS IN 2022
Strong demand for content
Scaling up for competitiveness
Digital disruption
Online gambling leading to more buyout
targets in sports data, content providers,
and gaming and app developers
Deals targeting artificial intelligence, virtual reality,
augmented reality and connective hardware
Continued rollout of 5G technology
and growing residential broadband availability
A return to the big screen
THE
INDUSTRIALS
& CHEMICALS
SECTOR
INDUSTRIALS REBOUNDING
Deal volume in 2H of 2021 outpaced the first half,
showing growing momentum
Deals exceeding $1 billion increased
over the same period
There was a spike
in 2021 M&A
deals in industrial
manufacturing,
with deal value up
by 50% over 2020
CHEMICALS ON THE RISE
Chemicals M&A deal volume and value rebounded
strongly in Q2 of 2021
Deal value in Q3 of 2021 surpassed total value of the
first half of the year due to several megadeals
Chemicals company executives are growing more
optimistic and willing to position capital for growth
Chemicals M&A activity is expected continue to be
strong in 2022
Private equity is more involved than ever in
chemicals M&A deals, with new companies engaging
in transactions
TRENDS DRIVING DEALS IN 2022
Optimizing portfolios and divesting
Investing in growth
Increasing flexibility and security
Extracting value
Digital transformation
Sustainability efforts
Continued antimicrobial demand
THE
AUTOMOTIVE
SECTOR
Semiconductor availability should start to increase
through the year
Global car sales are expected to rise but are likely to
remain about 6% below pre-pandemic levels
In 2021, auto manufacturers comprised 45% of deal
value, at $61.3 billion, primarily due to SPAC deals and
other investments in new-energy vehicles (NEV)
Investments in NEV were strong in 2021
across all segments, and are expected to drive
further M&A in 2022
Global conditions
are expected to
improve in 2022 as
demand and supply
chain challenges ease
TRENDS DRIVING DEALS IN 2022
New tech & new capital will continue to jumpstart
M&A in the auto industry
As ride-sharing downtrends, a new wave of car
buyers is anticipated in 2022
Increasing consumer adoption of e-commerce will
drive investment by dealers in:
Online sales platforms
Contactless payment
Vehicle delivery
Companies may seek M&A to avoid future supply
chain problems by improving inventory through new
regions or supply chain networks
THE POWER &
UTILITIES SECTOR
Financial players accounted for 62% of the total deal
value, up from 28% in 2020
Corporate deals dominated the space,
accounting for 78% of total deal value
Renewable deals contributed largely to deal activity,
with 29% of total deal value
In the last year,
the sector saw a
boost in deal value,
up 3% from 2020
TRENDS DRIVING DEALS IN 2022
Legislative, regulatory and corporate policy focusing
on de-carbonization and clean investments
Increasing ESG efforts in the areas of climate
change, social justice, equality and diversity
An abundant availability of capital
A competitive market for individual asset classes
Digitalization & decentralization
Resiliency planning strategies amid increasing
severe weather events
Improving electrical grids
PRIVATE EQUITY
Firms increased their role in
transaction value in 2021 by more than 55%
PE and venture capital firms globally raised about
$1 trillion through December 21, 2021. That’s up 35%
from the end of 2020
The first three quarters
of 2021 saw PE firms
involved in 6,441
deals worldwide,
valued at $1.6 trillion
TRENDS DRIVING DEALS IN 2022
Possible hikes in corporate capital gains taxes
The possible raising of interest rates, which will
drive up borrowing costs
Economic recovery from the COVID-19 pandemic
THE LABOR
SHORTAGE
30%
36%
49%
During the height of the
pandemic, acquiring
talent as a reason to buy
a business rose to
of workers who quit their
jobs in 2021 did so without
another job lined up
of business owners say
the labor shortage is
affecting their business
Widespread talent
shortages will
continue to drive
M&A deals in 2022
The growing trend known as “acquihiring” will
continue—the hiring of skilled labor from other
companies through M&A
Businesses are seeking automation to address
labor shortages, which is a driver for M&A to gain
more advanced technology
SUSTAINABILITY
Support is growing from all stakeholders for changes
to environmental footprints
Investors tend to consider sustainable businesses
more adaptable to market shifts
Environmental, social and governance (ESG) issues
will also continue to remain in the spotlight
Sustainability
initiatives are also
among the motivating
factors behind more
M&A transactions
across industries
ABOUT
BENCHMARK
INTERNATIONAL
Benchmark International’s global offices provide
business owners in the middle market and lower
middle market with creative, value-maximizing
solutions for growing and exiting their businesses.
To date, Benchmark International has handled
engagements in excess of $8B across various
industries worldwide. With decades of global M&A
experience, Benchmark International’s deal teams,
working from 14 offices across the world, have
assisted thousands of owners with achieving their
personal objectives and ensuring the continued
growth of their businesses.
BENCHMARKINTL.COM
DATA FROM MERGERMARKET & U.S. CENSUS BUREAU