IMAP closed 57 M&A transactions valued at over $17 billion in the first quarter of 2022. This figure was about half the record high 111 deals closed in the last quarter of 2021 but consistent with Q1 results from previous years. Persistently abundant liquidity, increased investor confidence amid a progressive lifting of COVID restrictions in many countries and a still large backlog of unresolved transactions sustained dealmaking activity in Q1.
Technology, Business Services, Industrials, Financial Services and Transportation & Logistics were the most active sectors, accounting for 65% of total deal volume. Ongoing digital transformation and evolving business models are driving convergence and deal opportunities across many of these sectors. Roughly 28% of IMAP’s transactions were cross-border, which is consistent with previous years and reflects the organization’s global nature. The bulk of IMAP’s Q1 deals involved a target company in either Western Europe or North America, although significant deal flow was also registered in Central and Eastern Europe, as well as in Scandinavia.
Many IMAP partners started the year with high expectations after a spectacular 2021, although ongoing disruptions to supply chains, volatile commodity markets, increasing inflation, and domino effects from the war in Ukraine have led to a tempering of optimism. Investors and strategic buyers have become selective in terms of the opportunities they will focus on and more cautious with due diligence to assess business risk. And yet, many of the underlying drivers in the global M&A market are expected to remain in place, including relatively cheap financing, large amounts of available liquidity and strong demand for high-quality assets. Succession issues also continue to be on the mind of many small- and mid-sized companies’ owners. Specialized companies in the IT, Healthcare and Financial Services sectors are expected to attract significant investor attention.
Jurgis V. Oniunas, IMAP Chairman, commented:
“The record M&A boom in 2021 and perceived stabilization of the COVID situation fueled optimism at the beginning of Q1. Global macro disruptions stemming from the pandemic were essentially counterbalanced by favorable dealmaking conditions. However, the Russian invasion of Ukraine in late February has injected a whole new level of uncertainty. In many countries and markets around the world. IMAP’s global team of advisors will adapt to the circumstances and continue to meet client needs, just like they did during the pandemic and previous economic disruptions.”