PitchBook - Annual Global M&A Report 2022

The PitchBook Annual 2022 Global M&A Report highlights that despite facing harsh macroeconomic headwinds, the global M&A activity remained resilient in 2022, marking its second-best year. However, the M&A value declined by 13.7% to $4.7 trillion as compared to 2021. The staggering inflation figures across global markets, driven by supply chain issues, rising demand, and labor shortages, led central banks to aggressively raise interest rates in 2022. In response, global equity markets tumbled during H1 2022, causing several setbacks in deal-making across the market. Russia's invasion of Ukraine further heightened market uncertainty, causing a pause in Q1 deal-making. However, buyers took advantage of cheaper prices, and median deal multiples declined. The report highlights that PE firms still have $1.3 trillion of dry powder globally, enabling sponsors to capitalize on attractive deals spurred by the market downturn that resulted in lower valuations and distressed assets. Additionally, sponsors continued to deploy capital despite a challenged financing environment, taking down deal sizes and turning to add-on acquisitions until lending markets become more accommodative to large platform buyouts. Add-ons accounted for a record 71.9% of buyout deals in 2022.