The 2022 Knowledge Economy Global Buyers Report provides unique insights into the M&A trends that buyers expect to take shape in the next 12 months, backed by rigorous data and contextualized by insights from Equiteq’s global team.
Twelve months ago, M&A activity in the Knowledge Economy sat atop a rapidly rising wave, having recovered sharply from the shock caused by the COVID-19 pandemic. Today, as both valuations and deal volumes have grown ever larger in the intervening year, we have a market that 72% of buyers say is overheating.
However, given that activity has risen from quarter to quarter, and with 40% of buyers agreeing that the pandemic will only strengthen their need for M&A in the long-term, we have a searing hot market intensity that a small majority of buyers (55%) believe will persist for at least the next 2-3 years.
Such activity though is of course contingent on the underlying demands of buyers, who are increasingly seeking out competitive advantage and growth through the broadening of service lines and delivery models. It is, of course, also dependent upon the supply of willing sellers, and there is no shortage of high-growth companies in the space, both founder held and in PE portfolios, to continue to support high deal volumes.
With nearly all buyers (98%) expecting more or the same volume of M&A capital next year, it’s clear that competition is likely to intensify as buyers seek to out-gun one another in acquiring advisory skills and capabilities across a mix of emerging technologies.
Add to this both a broadening of geographical areas of interest and the added incentive to complete transactions before possible changes to capital gains tax treatment in the US, and we have an almost perfect storm of converging interests that will drive even more activity in the coming year. Given the buyer sentiments expressed in our research, the takeaway is clear: M&A activity in the Knowledge Economy is unlikely to retreat anytime soon.
Download the full report here to see the complete results and insights from the survey.
We also hosted a webinar discussing the key results and what they mean for sellers and buyers considering a transaction in 2022.