M&A Year In Review
M&A actively flourished in 2021, far surpassing historical records. Activity was primarily driven by private capital markets continuing to deploy cash while remaining in a state of excess liquidity, corporate balance sheets flush with cash and low interest rates.
- Globally, for the year 2021, an estimated 38,231 M&A transactions were completed representing over $5.5 trillion of deal value and up nearly 64% from the year prior.
- In North America, an estimated 18,539 M&A transactions were completed for a combined $2.8 trillion, comprising 48.5% of global transaction volume.
- The financial service, healthcare, and technology industries led the way in Global M&A activity in 2021, with over 11,900 transactions complete collectively.
- Overall, total debt averaged 3.8x for the quarter, with senior debt accounting for 3.3 turns of leverage.
- Deals of $500M and below continued to represent nearly 94% of deal volume.
- Private equity fundraising has risen to unprecedented levels and continues to grow with approximately $3.3 trillion of capital committed but not deployed.
Despite a positive M&A outlook, slight caution is emerging over rising inflation and looming interest rate increases that will hike up the cost of capital and reduce financial firms and companies’ buying power.