42015590 - Horizons Q2 2022_v06

HORIZONS | BDO'S GLOBAL VIEWOF MID-MARKET DEAL ACTIVITY 15

UNITED KINGDOM& IRELAND M&A MAKES A STRONG START TO 2022

With rising inflation and the war in Ukraine, it is going to be hard to maintain 2021’s boom in M&A activity but global private equity and international trade buyers have been busy completing deals to date as they continue to seek investment opportunities in the UK & Ireland. Q1 2022 saw a strong start to the year with 153 deals announced with an aggregate value of USD 15.7bn. This represented an increase of 22% in deal volume from the final quarter of 2021 but a 15% decline in volume compared to last year’s record-breaking first quarter. Private equity buyers remained active in the region with one of three transactions being PE-led. However, the total aggregate value in Q1 2022 was USD 4.1bn with fewer large transactions reported as funds looked to spread the risk and became more cautious on valuations when trying to assess the impact of inflation and rising interest rates.

Despite the uncertainty of Omicron and the unfolding of the Ukraine crisis, the appetite of trade buyers remained strong with 102 reported deals totalling USD 11.6bn. Some significant transactions included Telefonica’s USD 220m acquisition of Incremental Group Ltd, a UK-based provider of IT services and Savvy Gaming Group’s acquisition of FACEIT for USD 500m as they merged it with ESL Gaming to create a ‘global esports ecosystem’. KEY SECTORS AND DEALS TMT remained the most active sector, accounting for nearly 40% of all transactions in the quarter. The technology sector remains a hotbed of activity from start-up companies through to global mega-deals. In Ireland, another two tech start-ups achieved unicorn status with food ordering platform Flipdish receiving a USD 100m investment from Tencent Holdings at a valuation of

BIG PICTURE

• Deal volume rose by 22% with 153 deals compared to Q4 2022 • PE buyers remained active with a third of all transacted deals • TMT accounted for 40% of all deals in the quarter • Strong M&A pipeline with 548 rumoured deals.

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