LEGAL Jonathan Grant, Head of DMH Stallard’s Corporate Department looks at what 2022 might bring for the M&A market in the South East
MERGER & ACQUISITION TRENDS 2022
A disrupted market creates opportunity for Mergers & Acquisitions THE DISRUPTION OF 2021 LED TO AN ACTIVE DEALS MARKET
2021 produced a strong South East M&A market, with successful, high performing businesses targeted by large trade buyers, private equity (PE) investors and private equity-funded groups, all looking to grow through acquisition. Buyers have pushed for quick deals, and prices have been high; this has in turn put pressure on sellers to be well prepared. The greatest activity has been in the £10m to £50m space and successful deals have been run by well organised/experienced deal teams able to manage the disrupted business environment.
2022 WILL BRING MORE OPPORTUNITY
In 2021 professional services (financial advisory/insurance broking), digital se r vic es (c o m munic atio ns and marketing), technology and SAAS, pharmaceutical/health sector, and builders merchants/construction related businesses have seen high deal volumes.
As we move into 2022, there is still consolidation in financial services, although now at the sub-£10m level and for insurance broking. Professional services in the form of accountancy and legal are continuing to see new entrants and pressure for consolidation.
❛❛ Logistics and infrastructure are sectors well set for M&A and investment ❜❜
Looking forward, I expect digital and online marketing/SEO to be in high demand reflecting the BD “pivot” required by many businesses. Less expected, is increasing interest for quality retail and leisure businesses. Whilst traditional retailing was hard hit in 2021, many online retail businesses surfed a wave of surging demand through lockdown. A market with this
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level of disruption creates opportunity for trade and PE buyers to build new businesses, as the market adjusts to a “new normal”. Expect businesses with quality brands to be in demand. Logistics and infrastructure are sectors well set for M& A and investment. Moving goods around the world continues to see demand exceeding supply. Acquisition offers an opportunity to improve margin for large manufacturers and luxury goods companies. Securing a reliable route to market will remain impor tant in protecting reputation. Meanwhile, large Government infrastructure projects, such as HS2, offer businesses who have secured tender contracts significant growth and opportunity.
