HORIZONS | BDO'S GLOBAL VIEWOF MID-MARKET DEAL ACTIVITY 01
GLOBALVIEW
DEAL ACTIVITY SLOWS IN FINAL QUARTER BUT 2021 REMAINS A STAND-OUT YEAR
After four continuous quarters of really strong deal activity, mid-market global deal-making took a dip in the final quarter of 2021. We do not see this as any great cause for concern as there is only so long that such high activity levels can persist before some respite. Looking at the aggregate amount of value, the dip is less pronounced in the final quarter, meaning that high amounts of capital are still being deployed. At a total value of over USD 220bn, the capital exchanging hands remains very high by historic levels. Taking 2021 as a whole, it really was a vintage year for deals with nearly 9,500 transactions. That represents a huge recovery on the COVID-impacted 2020 and is well up on the pre-pandemic year of 2019.
America saw nearly 45% increase in deal activity in 2021, compared to a less than 10% increase for Greater China. In the final quarter of the year, only Japan and Greater China saw an increase in deal activity with every other region experiencing a decline in deals.
In terms of sectors during 2021, TMT and Industrial & Chemicals remained the most prolific, representing around 20% and 30% respectively of total deal activity. Compared to the prior year, TMT deal activity nearly 60% higher, with financial services the next highest riser at over 45% up. Indeed, every sector experienced higher activity across the year. Looking around the world, every region saw an increase in deal activity during 2021. The two dominant regions remain as North America and Greater China but the proportions have changed. North
When we consider the mix of the deals, we can see that the final quarter tail-off was more influenced by lower private equity activity and value than trade. The chart on this page shows that clearly with dome- shaped PE aggregate value of deals across the year. That puts the split of deal activity of trade vs equity for 2021 at around 75:25 and the split of aggregate value at around 70:30. Compared to historic levels, this represents a rise in global PE investing and this has been a big driver of the resurgence in the M&A market post the onset of the pandemic.
GLOBAL MID-MARKET M&A
3,000
300,000
2,500
250,000
2,000
200,000
150,000
1,500
100,000
1,000
500
50,000
0
0
2008 2009
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2010
Trade Volume
Total Value (USD M)
PE Value (USD M)
PE Volume
Made with FlippingBook HTML5