PitchBook - 2022 Annual Global MA Report

The 2022 Annual Global M&A Report showed that despite challenging macroeconomic conditions, M&A activity remained strong with a value of $4.7 trillion, down 13.7% from 2021. 2021 saw a record-breaking year for M&A activity, as the market rebounded from the COVID-19 slowdown and thrived in a more confident environment. However, the start of 2022 was impacted by inflation, rising interest rates, and uncertainty caused by Russia's invasion of Ukraine. These factors led to a decline in company valuations and made leveraged loans more difficult to obtain, leading to a pause in dealmaking. Despite these challenges, buyers took advantage of lower valuations, with median deal multiples declining to 8.8x EBITDA. PE firms still had $1.3 trillion of dry powder, allowing them to capitalize on attractive deals. Sponsors continued to deploy capital through smaller add-on acquisitions, which accounted for a record 71.9% of buyout deals due to their smaller size and easier financing. Despite macroeconomic headwinds, M&A activity remained resilient and was 20% higher than pre-pandemic levels for the three years ended in 2019.