The Law Offices of Jeff Peterson
  • About Us
  • Practice Areas
    • Mergers and Acquisitions
    • Securities Law
    • Corporate Transactional Law
  • Industries
  • Resources
    • Blog
    • FAQs
  • Contact
  • Search
  • Menu Menu
Charging Bull sculpture in New York City

M&A trends for 2022

December 22, 2021/in Mergers & Acquisitions, News /by Jeff Peterson

The road ahead for Mergers & Acquisitions

2021 saw robust mergers and acquisitions activity. As the year came to a close, there has been no sign that this trend of increased M&A activity will slow down. So, what trends should business owners and M&A attorneys look for in 2022? Hindsight is 2020… well, it’s 2021 but who’s counting?

The drivers of increased M&A activity

Looking back at the year 2021, the greatest drivers of the increased M&A activity were COVID’s impact both on business owners’ choice to retire or sell, and on their choice to grow into new markets through well-priced sales of companies who struggled during the shutdown and supply chain disruptions that followed.  Increased liquidity affected M&A volume driven by PPP loans, EIDL loans and low-interest rates making capital less expensive. And the change in the world of work from analog to digital, accelerated by the remote work surge that has bolstered SaaS, digital security, and other remote-work facilitation hard and software companies. 

Looking forward to 2022

It is challenging to predict the trends that will define the coming year. One thing COVID has taught the business community is that the unexpected can throw a wrench into the best-laid plans at any moment. While we can look at the past year to see how certain language and activity is affecting the M&A markets right now, these are inferences, not a crystal ball to predict the future.  One way to look at the coming shifts is to look at the changes in volume of certain terms in SEC filings in M&A transactions that have closed over the past 2 years. As we look at the 2022 market trends we can see that there are upticks in reported language in those SEC filings of M&A closings as reported in Bloomberg Law’s article here. The trends indicate that certain terms are appearing more in the last quarter of 2021 than in previous years by notable amounts.  

“Remote work” 

“ESG” 

“Climate Change” 

“Crypto” 

And because this is now year 3 of the pandemic and we show no signs of moving past it, “COVID” and “vaccine” rank among the terms which have seen marked upticks in the latter half of 2021. 

According to other surveys from MiBiz,”automotive, energy, financial services, technology and media, and health care rank as the top five most-active sectors for [2022]”. 

Environmental, Social, and Corporate Governance (ESG) and its impact on M&A volume

In addition to shifts in the interest in ESG and climate-friendly business, the Private Equity activity in 2021 has been strong. Despite impending tax legislation and increased antitrust scrutiny, business owners continue to seek to diversify their portfolios by acquiring companies that give them access to new products, services, and technologies. With PE funding more accessible than ever, the M&A landscape seems to be robust and headed for another bull year. 

The fact that the Biden Build Back Better legislation appears stalled for the foreseeable future means that increased business taxes are now pushed off into the future means that businesses who acquire or merge will not face the kind of tax bracket jump that they would have under the proposed bill. This roadblock removal may stoke the fires of the already hot M&A market. 

Overall the 4 major players in the 2022 M&A market can be culled down to: 

1: A hot Private Equity Market

In 2021, PE transaction value rose more than 55%

2: ESG forces

Businesses may consider purchasing or divesting assets to align with ESG. Practically speaking environmental factors will affect the future of business and strong ESG will allow businesses to better adapt to those shifts.

3: Remote work

Digital transformation of analog processes means more investment in SaaS companies and other cloud-based initiatives.  From cyber security to remote teams management, digital is the way forward.

4: Inflation

The sharp spike in inflation may mean a temporary slowing of M&A activity, though the inflation between 2007 – 2009 did nothing to curb Mergers and Acquisitions. This inflationary bubble is likely to dissolve with low interest rates still in place once the supply chain issues resolve. 

To sum it all up: 

The M&A market is not slowing down.  Successful M&A strategies will involve specific industry targeting and an awareness of the elevated valuations that exist in certain market sectors. Increased deal complexity will necessitate better assessments of risk and liability as well as stringent due diligence processes and targeting of the correct funding sources for each transaction.

Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
  • Share by Mail
https://lawofficesjtp.com/wp-content/uploads/2021/12/iStock-666589480.jpg 1420 2111 Jeff Peterson https://lawofficesjtp.com/wp-content/uploads/2021/11/JTPlogo-01.png Jeff Peterson2021-12-22 14:47:582022-02-10 10:43:43M&A trends for 2022
JTP Brandmark

Categories

  • Corporate Transactional Law
  • Mergers & Acquisitions
  • News
  • Personal
  • Securities Law

M&A Articles

  • Charging Bull sculpture in New York CityM&A trends for 2022December 22, 2021 - 2:47 pm
  • M&A AGREEMENTSSANDBAGGING CLAUSES IN M&A AGREEMENTSNovember 10, 2021 - 3:22 pm
  • Law services in Chicago and San Diego - A lawyer's hand, pen and overlayDEFINING A SELLER’S KNOWLEDGE IN AN M&A AGREEMENTOctober 24, 2020 - 5:19 am

Corporate Transactional Law Articles

  • DEI for legal teamsDEI for legal teamsJanuary 11, 2022 - 12:21 pm
  • Closing a business in CAHow to Close a Business in CaliforniaNovember 22, 2021 - 2:36 pm
  • Law Offices of Jeff Peterson at workAN OVERVIEW OF SEC REVISIONS TO FORM ADV AND RECORD-KEEPING RULENovember 9, 2021 - 1:43 pm

Securities Law Articles

  • Chinese companies are delisting off the N.Y.S.E.Chinese Companies Delisting off the NYSEJanuary 4, 2022 - 2:54 pm
  • Words insider trading written on a book.SEC CHARGES CHINESE NATIONAL CITIZENS WITH INSIDER TRADING, OBTAINS ORDER FREEZING $29 MILLION IN U.S. ACCOUNTSFebruary 13, 2017 - 12:11 pm
  • Texas Attorney General Ken PaxtonSEC REFILES FRAUD COMPLAINT AGAINST TEXAS AGOctober 24, 2016 - 8:45 am

LINKS

Privacy Policy
Disclaimer
FAQs

SAN DIEGO

12526 High Bluff Dr.,
Suite 300 San Diego, CA 92130

Phone: 858.792.3666
Fax: 858.792.3667

CHICAGO

444 West Lake Street, 17th Fl.,
Chicago, IL 60606

Phone: 312.583.7488
Fax: 312.548.7480

CONNECT

USERWAY

Small UserWay Logo

Disclaimer: The information on this website is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained on this site should be construed as legal advice from The Law Offices of Jeffrey T. Petersen or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this content should act or refrain from acting on the basis of any information included in, or accessible through, this website without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

© The Law Offices of Jeffrey T. Petersen 2022

site design by digitalstoryteller.io

© The Law Offices of Jeffrey T. Petersen 2022

site design by digitalstoryteller.io

How to Close a Business in California Closing a business in CA Chinese companies are delisting off the N.Y.S.E. Chinese Companies Delisting off the NYSE Scroll to top

This site uses cookies. By continuing to browse the site, you are agreeing to our use of cookies.

Accept settings

Cookie and Privacy Settings



How we use cookies

We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.

Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.

Essential Website Cookies

These cookies are strictly necessary to provide you with services available through our website and to use some of its features.

Because these cookies are strictly necessary to deliver the website, refuseing them will have impact how our site functions. You always can block or delete cookies by changing your browser settings and force blocking all cookies on this website. But this will always prompt you to accept/refuse cookies when revisiting our site.

We fully respect if you want to refuse cookies but to avoid asking you again and again kindly allow us to store a cookie for that. You are free to opt out any time or opt in for other cookies to get a better experience. If you refuse cookies we will remove all set cookies in our domain.

We provide you with a list of stored cookies on your computer in our domain so you can check what we stored. Due to security reasons we are not able to show or modify cookies from other domains. You can check these in your browser security settings.

Google Analytics Cookies

These cookies collect information that is used either in aggregate form to help us understand how our website is being used or how effective our marketing campaigns are, or to help us customize our website and application for you in order to enhance your experience.

If you do not want that we track your visit to our site you can disable tracking in your browser here:

Other external services

We also use different external services like Google Webfonts, Google Maps, and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.

Google Webfont Settings:

Google Map Settings:

Google reCaptcha Settings:

Vimeo and Youtube video embeds:

Other cookies

The following cookies are also needed - You can choose if you want to allow them:

Privacy Policy

You can read about our cookies and privacy settings in detail on our Privacy Policy Page.

Privacy Policy
Accept settingsHide notification only