HORIZONS | BDO'S GLOBAL VIEWOF MID-MARKET DEAL ACTIVITY 35
MIDDLE EAST DEAL-MAKING STAGES STRONG COMEBACK IN 2021
On the back of accelerated vaccination programmes, the Middle East region recorded a strong rebound in M&A activity during 2021 with 55 deals in the mid-market space with a total deal value of USD 5.7bn – approximately 25% up in terms of both volume and value. Q2 2021 saw the highest recorded deal value of USD 2.0bn, the first quarter to hit this figure since Q2 2019. KEY DEALS AND SECTORS TMT remained at the forefront of sector activity in 2021 with 11 transactions compared to six in the previous year. Technology led the sector with a major focus in financing deals across Fintechs, payment gateways and online marketplaces. The Financial Services and Industrial & Chemicals sectors were in second place with nine transactions each. Financial Services saw increased transaction levels as a result of drive by the Saudi Central Bank to encourage mergers across insurance companies and banks to
make the sector highly competitive and strengthen its financial position. According to Prequin, the Middle East PE market has experienced constant levels of growth since 2016, with 33 new venture capital managers entering the market between 2018 and 2020. Combined with stalling growth in Asia-Pacific in the same period, this reflects the importance of the region’s market. Prequin’s study concluded that “Private capital AUM in the region rose 11% from 2019 to 2020, with stronger growth in dry powder (14%), suggesting renewed investor appetite for commitments to local managers”. TRANSFORMATION During 2016, the Kingdom of Saudi Arabia launched a strategic plan designed to transform the country’s economy, reduce its dependence on oil and nurture a vibrant society, known as Vision 2030. As part of the transformation drive, the Kingdom intends to privatize state-owned enterprises to optimize operations and reduce budgetary deficits. Recently, the Kingdom privatized all the state-owned
BIG PICTURE
• Overall the Middle East M&A market saw a strong post-pandemic revival with 323 deals completed during the first three quarters of 2021 compared to 175 deals for the comparable period of 2020. In the mid-market space, deal volume and value increased by 25% • There was an uptick in initial public offerings with Saudi Arabia (KSA) recording 15 listings to raise USD 5.1bn. The IPO pipeline is expected to stay strong for 2022 • TMT recorded an 83% increase with 11 mid-market transactions. The growth in TMT is expected to continue, mainly driven by government-led transformation plans in Saudi Arabia and Abu Dhabi.
PE/TRADE VOLUME &VALUE
1000
120,000
0 500 400 300 200 100 600 700 900 800
100,000
80,000
60,000
40,000
20,000
0
2008
2009
2010
2011
2012
2014
2015
2016 2017
2018
2019
2020
2021
2013
Trade Volume
Total Value (USD M)
PE Value (USD M)
PE Volume
Made with FlippingBook HTML5