2022 M&A Outlook

Hi, curious to see what everyone's thoughts are for 2022 M&A. Seeing a bit of a slow down in our group (MM HC) but don't know if it's just a Q1 hangover from 2021 volumes. Sounds like consensus is that activity will be down from 2021 but not too bad overall. Some factors driving this slowdown:

  • Continued war in Ukraine could pose economic issues
  • Runaway inflation risk
  • Increasing rates will weigh on valuations 
  • Lower quality assets coming to market that didn't get attention in 2021


Comments (18)

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rabbit, what's your opinion? Comment below:

I think will still be a good year. Maybe not as good as the last couple without all the SPACs.

Good amount of dry powder out there. Lots of funds raised over the last few years that need to deploy and strategics, at least in my coverage, have built up pretty substantial warchests for acquisitions.

Valuations are coming off + above point on dry powder = consolidation and opportunistic M&A. For example, sectors that got the "COVID bump" like digital health

If higher rates weigh down private / VC allocations, we may see the pace of that segment slow down. I deal mostly with private cos and the incentive to sell was very low given the abundance of private capital. If that tap goes off, may see more assets in market. Quality TBD

Will be interesting to see though what happens with higher rates. The days of slapping on leverage and sitting back to make bank are shifting yet sponsors are under the gun to deploy. I think the true operators / value creators will shine and the financial engineers will obviously need to get more creative.

bankinthetank, what's your opinion? Comment below:

Looking at 2022 league tables so far, M&A activity is down about 30% and IPOs are down about 80% compared to the same period last year. Estimated fees are also down about 40-50%. This will definitely be a slower year than 2021, especially with the slump in stocks (tech and otherwise) and the impending risk of a stock market crash/sell-off. 2020/21 were record years though, so this is kind of not too troubling - at least not yet. I'd say buckle in and enjoy the slower work, while keeping eyes peeled for potential exit opps just in case things get outta hand.

  • Investment Analyst in HF - Event

Equity and Debt Financing are way lower this year relative to the year 2021, Last year was also the record year for LBOs(LevFin) since 2007. 

Furthermore, Rates Hikes are going to be very low from a historic perspective no way the US government can service their debts at a high level. The outlook for 2022 and 2023 is lower than the 2021 activity. In addition to that, the DOJ and FTC have adopted cunt like behavior with blocking multiple deals , not only that they are floating the idea of being more tougher on M&A activity and the ability of FTC to block mergers without court orders

Under the Warren and Jones proposal, a "prohibited merger" would include deals valued at more than $5 billion, deals resulting in market shares of more than 33 percent for sellers or 25 percent for employers, and deals resulting in highly concentrated markets under the 1992 agency guidelines.  

The Prohibiting Anticompetitive Mergers Act would allow the Federal Trade Commission (FTC) and Department of Justice to reject large merger deals without a court order. It would also give the government power to retroactively break up deals that resulted in a market share above 50 percent or "materially harmed" competition, workers, consumers, or small or minority-owned businesses. 


  • 2
  • VP in IB - Gen

M&A should be above historical averages if not at the level of 2021 but capital markets has ground to a near-halt now.  That will result in it coming roaring back if spreads narrow and then we'd be okay even from that perspective.  Risks are tilted to the downside though, think we're at higher risk of a meltdown vs meltup.  Also think that tech has had its day in the sun for now, unlikely to see those kind of valuations / sector growth going forward, at least for a while.

  • Intern in IB-M&A
[Comment removed by mod team]
  • Associate 3 in IB - Cov


  • Intern in IB-M&A
[Comment removed by mod team]
  • Associate 1 in IB-M&A

Thanks for the bump. Here is my dumb opinion as we have laid off underperforming MDs/Ds recently, no plans to hire more juniors. We do sellsides in the MM industrials space fyi, mostly to sponsors.

We are in the middle of a recording hiking campaign/recession and people think LBOs will magically fall out of the sky because of the dry powder... dry powder, which is outperforming public equities YTD. Cash is not trash like some HF PMs may want you to think.

If the market crashes, rates likely drop and the whole cycle begins again. More money printer.

It's a waiting game on new processes and a rush to close existing processes.

Great time to start raising an "operations-focused" PE fund into what I assume will be a rough year for M&A unless, unironically, the market crashes and drives consolidation. Hold periods will extend and portcos will roll. Distressed M&A should do pretty well though.

Then again, Powell may just pivot and money printer go brrr then we go full Venezuela by throwing fake money at everything with a pulse. Yes, English is my first language.

  • 2
bethanyjohnson, what's your opinion? Comment below:

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