Dealmaking is expected to continue crumbling even in 2022.

Telecom Tech Outlook | Wednesday, January 12, 2022

Tech sector is dominated in dealmaking which can be related to Microsoft and Autodesk acquiring Nuance and Innovyze, respectively, for 19.7 billion dollars and 1 billion dollars.

FREMONT, CA : Regarding dealmaking, the tech sector leader Nuance, a cloud and AI software company that mainly deals with the health sector, was acquired by Microsoft for 19.7 billion dollars. Autodesk bought Innovyze, a water infrastructure software company, for 1 billion dollars. According to a new PwC report, the most announcements of U.S. megadeals were seen in 2021, which transacted for a minimum of 5 billion dollars. However, there was also a major rise in volume among not-quite-mega deals.

The report also noted that more than 900 transactions were announced in 2021 compared with a typical year of about 400 to 500 deals of 500 million dollars to 5 billion dollars worth. This year, the red-hot M&A trend was driven by access to capital, however, the experts wonder if this M&A acceleration will continue or cool down in 2022. The asset management industry has set a torrid pace for M&A this year, and they predict that perhaps a little more serene will continue in 2022, although likely more global and less concentrated on cost-cutting.

Brian Salsberg, EY Global Buy and Integrate leader explained how the outlook is hugely bullish and exciting for anyone who does M&A, and at least for the next year, there are no signs of a slow-down. He added that the inflation rate would not impact the appetite for M&A. Moreover, they will always pay attention to the antitrust climate. He also added that antitrust is not a concern as these actions have taken place in the past, which has not been a barrier.

Furthermore, Colin Wittermer, deals leader, PwC US, stated that if private equity (PE) is taken as a percentage of deal volume, an increment from 24 percent in 2017 to 37 percent in 2021 can be noticed. If one also adds the subsequent acquisition, which was not accounted for, in that 37 percent as it was only regarding a PE platform, then PEs can currently be estimated as half of the M&A volume, which is another interesting trend to look for.