Private Equity: Switching on in 2022
Private Equity, The Netherlands | Report | Q1 2022
Dealmaking showed a very strong start in 2022, even outpacing a record-breaking 2021. However, the geopolitical tension kicked in around February and March, resulting in an overall drop in deals in Q1 2022.
Global dealmaking in Q1 2022 is down around 20% compared to the same period in 2021. The drop resulted mainly from much lower PE activity in the deal market, with strategic deals only decreasing slightly, as can be read in this report.
Nonetheless, we remain very positive for 2022. We have seen very few deals that have been cancelled because of the market conditions. In addition, most projects that have been delayed or put on hold are expected to only be delayed temporarily. With M&A advisors having full pipelines, PE's eagerness to deploy their large piles of dry powder and banks remaining open, we foresee a strong rest of the year, unless any major negative events take place.
M&A activity in the Netherlands
Q1 shows a slowdown in M&A activity in the Netherlands as geopolitical turmoil takes its toll. After a record-breaking 2021, M&A activity in the Netherlands lost pace in Q1 2022. 2022 started relatively slow with 270 deals, which is a 19% decrease with respect to Q4 2021. PE deals in particular show a significant drop of 39%. Strategic deals also decreased, but at a less steep rate.
January started strong with 112 deals, outpacing an average of 100 deals per month in 2021. Unsurprisingly, coinciding with Russia’s invasion of Ukraine in mid-February, February (80 deals) and March (78 deals) showed a significant decline compared to recent months. This drop in dealmaking is primarily driven by targets' current trading being impacted by high energy costs and supply chain issues, as well as by buyers taking more time to see how the geopolitical turmoil evolves before going through with acquisitions.
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