After the initial halt that COVID-19 brought to dealmaking, M&A began to recover in the latter half of 2020, as dealmakers rapidly adjusted to working in the “new normal”. Buyers began pursuing deals that had been derailed by the onset of the pandemic and pouncing on the new strategic and distressed opportunities that coronavirus created.
This recovery continued throughout 2021, with UK M&A markets seeing record levels of activity, driven by factors such as pent-up demand among private equity buyers, ongoing COVID-related distress and growing interest in sectors that were responsive to aspects of pandemic life, such as domestic travel and cybersecurity.
As a result of this strong recovery, the M&A market, both globally and domestically, is heading towards the end of 2021 with high levels of confidence and widespread forecasts that 2022 will see the resurgence continue, or even accelerate further.
A survey of 300 global dealmakers by Mergermarket found that two thirds of dealmakers expect increased M&A activity over the next twelve months, while 24 per cent of respondents expect a “significant increase”. Looking at the UK more specifically, an Ansarada survey of UK dealmakers revealed an even higher degree of confidence, with 90 per cent of dealmakers expecting an increase in M&A and over half (54 per cent) forecasting that activity will increase significantly.
As we head into 2022, then, what are the key factors and sectors that could be at the forefront of this potential surge? We’ll also examine some of the possible headwinds that the M&A market could face and consider how dealmakers can best respond to these challenges.
Pandemic-related distress continues to be felt
Digital transformation gathers pace
UK continues to attract inbound investment
Private equity appetite grows
What potential headwinds does the dealmaking revival face?
This is a distribution, freight, and logistics business based in the East of England; it is now on the market.
An opportunity has arisen to acquire a company that offers design and installation services alongside planned preventative and reactive maintenance/repair.
An opportunity has arisen to acquire a business that specialises in the manufacture of high-quality conveyors and mechanical handling equipment.
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