UK M&A Market Activity Year End 2022

The latest Experian Market IQ Report was published recently, detailing UK M&A performance and activity for 2022.

We've crunched the numbers and looked back a little further to help measure where we're currently at...

Forecasters have had a torrid time predicting merger & acquisition trends recently. As the world attempted to recover from the pandemic, we've had the impact of a European war, plus a global energy crisis to contend with, making it even harder to predict spending and investment.

As we approach the end of Q01619751521, we know the final figures for 2022.

Was it a good or bad year? Can we simply measure against 2021?

2021 was the year that M&A bounced back post-pandemic, with investors keen to acquire companies in the mainly unaffected sectors (health, tech, and financial/support services). Additionally, 'pre-pandemic agreed' deals were able to complete and this burst of investment activity was unlikely to be sustained. Not a great yardstick to measure 2022 against!

We've taken these figures for 2022 and put them alongside figures going back to 2019 to compare against pre-pandemic levels to get a deeper understanding about where we've come and in what direction we might be going. Let's delve into it...

UK DEALS BY VOLUME

If we take the year on year figures for 21-22 we can see that only the Infocomms, Manufacturing, and Health sectors witnessed increases in the number of completed deals.  Yet, we can flip that by comparing the pre-pandemic numbers of 2019 with 2022 which show only Manufacturing and Financial Services experiencing a dip in the number of deals.

UK DEALS BY VALUE (£M)

We performed the same exercise, this time on UK deal values across the same time period.

The above table reveals some major increases and decreases in the amount of money being spent on M&A in the UK between 21-22 and 19-22 respectively.

Looking at 21-22 to begin with, we can see that only the Construction sector revealed the signs of recovery with a 10.2% increase in spend.  Positive news for a sector that was in danger of being left behind in recent times. 

Supply and logistical challenges are evident in the figures for Wholesale & Retail which suffered the most in 2022 with a -70.3% drop in deal values.

Let's look at the pre-pandemic 19-22 comparison. In addition to the Construction sector, the notable increases were across Professional Services, Financial Services, and Health, 3 of the main sectors unaffected by the global challenges and seen as current hot investment prospects.  Notably, the Infocomms sector (after a boom in consolidated deals at the start of the pandemic in 2020) has seen a levelling off in the years since.

CONCLUSIONS

There are obviously many factors to consider when reviewing the numbers and drawing comparisons between 4 years of figures doesn't provide every single detail on each sector.

But this exercise does shed light on the broader picture across UK M&A. 

Depending on your source material and which forecasters you follow, this should help to draw your own conclusions on the state of play today.

As always, should you be considering an exit or looking to sell your company, it's best to explore all the options available to you.  Here at La Salle, because we specialise in sell-side, we work closely with shareholders and company owners to evaluate the best options for you, the individual, to get the maximum return on your years of hard work.

Reach out today for an initial, informal chat to see how we can assist you. 

All conversations are in complete confidence.