2021 was a record-breaking year for M&A deals. Global deal value rose to an unprecedented $5 trillion, smashing the previous record of $4 trillion set in 2007. In the United States alone, deal value records rose to $2.6 trillion, doubling the deal value of 2020.
Given that new records were set in the United States and all over the world in 2021, demand for M&A deals is clearly on the rise and many business owners and private equity firms are racing to find undervalued targets in 2022.
You may have already heard about Microsoft’s recent plans to acquire Activision Blizzard, one of the largest video game companies in the United States, for $68.7 billion, and that’s not all that’s swirling in the M&A-sphere in the first half of 2022. Some potential M&A targets for 2022 include well-known companies such as the fitness giant, Peloton, Kohl’s, and a leader in clean technology, Petroteq Energy (with offers already presented to Kohl’s and Petroteq).
Let’s take a look at the some of the heavy hitters that are already making headlines in the following key sectors, as well some deals that are on deck:
Technology was a coveted industry for US and global M&A deals in 2021. According to the PwC Global M&A 2022 outlook, new market opportunities, tech convergence, and an abundance of capital are paving the way for deal-making opportunities across the technology sector in 2022.
Tech advancements led to significant industry growth in 2021, which means more M&A deals in 2022. PwC predicts hotspots in the areas of crypto and NFTs as emerging markets are established. Moreover, with the pandemic coming to an end, business owners will begin to seek opportunities for consolidation, which will lead to an insurgence of M&A deals in 2022.
CMM attorneys were at the forefront of the tech M&A wave in 2021, representing an artificial intelligence tech leader in a complex recapitalization and M&A transaction in which CMM helped negotiate the terms of a multimillion-dollar loan agreement.
As for how tech deals are already playing out, Microsoft’s acquisition of Activision Blizzard could be the biggest tech/entertainment M&A deal in 2022. Another hot M&A deal announced in Q1 is Sony’s plan to buy Bungie, a gaming company, for $3.6 billion. Citrix, the cloud computing and virtualization company, has reported that they are being acquired by private equity firms Vista Equity Partners and Evergreen Coast Capital for $16.5 billion.
Healthcare & Pharmaceuticals
Deals in this sector rose to $288.9 billion in the US with SPAC (Special Purpose Acquisition Company) mergers playing a strong role in driving activity. In their 2022 M&A outlook, PwC predicts healthcare services consolidation and re-sale to lead M&A deals within this sector. We will also likely see more cross-border expansion and consolidation of private clinic and specialist care providers.
Proving the trend predictions correct, CMM already successfully represented a New York vet practice in the multimillion-dollar sale of its business to a larger partnership focused on acquiring vet practices around the tri-state area.
According to Digital Health Business & Technology’s data, there have already been 65 M&A deals in the digital health sphere in the first quarter of 2022. Additionally, several healthcare companies have been named targets for 2022 such as Health Gorilla and Summus Global.
Manufacturing & Aerospace
Within the manufacturing industry, PwC also predicts strong M&A activity in 2022 as companies target vertical integration and operational consolidations. Likewise, as air passenger numbers increase in 2022, M&A activity in the aerospace and defense industry will also increase.
CMM attorneys recently represented a leading manufacturer in the sale of its business, assets, and property, resulting in a multimillion-dollar transaction. The team also negotiated and closed a complex transaction in the aerospace field, selling a family-owned aerospace supplier’s business to a Connecticut-based private equity firm.
As for deals already happening in the first quarter of 2022, Frontier Airlines and Spirit Airlines, the two largest discount carriers in the United States, have announced a merger in a deal valued at $6.6 billion. Private flying is also growing more common, a trend already reflected in aerospace M&A with Vista Global Holding announcing their acquisition of the U.S. charter operator Jet Edge for an undisclosed amount.
CMM’s Most Recent M&A Deals
With the second quarter of 2022 underway, we already see 2022 M&A heating up. Curious to see what CMM has been up to recently in the M&A space?
View the firm’s recent M&A highlights here.