By all accounts, 2021 was a banner year for global M&A with deal activity exceeding pre-pandemic levels and nearing peaks of the last decade.  Based on first quarter results, this robust trend generally appears to be continuing in 2022, as strategic and financial buyers continue to pursue transactions in a number of different industries. Although global deal activity has dipped relative to H2 2021, it remains well above levels observed over the past five years. In addition, given the market turbulence and valuation shocks experienced this year, acquirors gain confidence, rightly or wrongly, they can opportunistically negotiate a “great deal” which should spur further activity through Q2 and beyond, particularly in the lower middle market.


Although inflation, geopolitical uncertainty, stock market volatility, and the prospect of continued Fed rate increases has throttled deal activity to some extent, buyers remain highly active pursuing M&A opportunities, based on recent polling data from the Alliance of Merger & Acquisition Advisors (AM&AA).


Moreover, in the year to date, some industries have attracted more deal activity than others.  Specifically, nearly half of 2022 transaction volume is concentrated in four industries: Business Services, Construction & Engineering, Healthcare, and Manufacturing: Source:  AM&AA 2022 Q1 M&A Market Report

Looking forward, factors anticipated to impact M&A through year-end 2022 include:

  • Macroeconomic trends : Inflation continues to layer uncertainty on the M&A landscape and weighs on consumer confidence.
  • Interest rates : The Fed has raised federal funds rate already in 2022 with a series of additional rate increases expected.
  • Private equity “dry powder” : Dry powder, or capital available for investment, continues to grow and currently stands at $1.3 trillion.  Firms are eager to put capital to work to earn a return.
  • War in Ukraine : Adds uncertainty and directly impacts companies with supply chains or customers adjacent to areas of conflict.

M&A has, and always will be, a compelling option to help companies grow more quickly beyond organic means. The more challenging the business environment, the more vital M&A will be to help companies continue to achieve growth objectives. At ButcherJoseph, we regularly advise business owners, CEOs/CFOs, and financial sponsors regarding their sale options and the current M&A environment.  Since 2011, we have advised on over $15B of M&A transaction value. The robust volume and rich breadth of sale transactions allows us to navigate complex transactional situations.  Above all, with our experience and rich connectivity to the investor universe, we can custom tailor a transaction focused on your specific objectives.

If you are an owner/executive who is thinking about selling your business, ButcherJoseph can help. We often begin the process with a complimentary Feasibility Study Analysis, which can help you understand the value of your company and the right type of transaction for you. To discuss further with our team, fill out our contact us form or reach out to me directly at david.lake@butcherjoseph.com or at 314-720-6385.

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