2022 M&A Outlook - IMAP International M&A Partners Share Their Views

USA

The outlook in the Consumer products market for the next 12 months with what is happening with the world, specifically Ukraine, is going to disrupt the supply chain even more. It's going to be harder to get product. They're going to be more expensive products. So the real challenge for consumer product companies in the United States today is actually getting those products to the consumer at affordable prices - that is by far the biggest challenge.

…a real challenge for consumer product companies in the United States today is actually getting those products to the consumer at affordable prices…

My market is the Consumer products market in the United States and the trends I'm seeing is a wholesale shift: our parents’ brands are not what kids these days are looking to buy. The younger generation is looking for their own brands that they associate with, that they believe reflects their lifestyle, which is 180 degrees different than their parents. What we're seeing is all the growth in consumer products is really coming from these new brands, matching the lifestyle and the ambitions of a new generation. It's really a sea change happening right now.

Kenneth Wasik, Capstone Partners, IMAP USA

FRANCE

With the very complex macro environment with the war in Ukraine, it's tough to predict but what we see at the moment is a decrease in the volume of transactions. The market is down about 30% in Q1 2022 from last year, which was a record year. 

…flight quality, volatility, uncertainty for some time to come…

Also we see much more volatile markets. Financial markets are closed for the moment so it makes transactions more complicated to finance and one of the consequences is a decrease in the multiples and this is going to be one of the trends. Flight quality, volatility, uncertainty and I guess we're going to have to live with that for some time. 

Cyril Kammoun, Degroof Petercam, IMAP France & Belgium

SPAIN

The outlook for M&A for the next 12 months is a bit difficult to say, but we are seeing a depress in corporate margins and a depress in consumer spending and the economic growth rate, coupled with the geopolitical situation and uncertainties -  e.g.: rising interest rates - all this should mean a decline in M&A activity.

However, there are some sectors that will benefit from these situations, such as Defense, Renewables, perhaps Logistics, and there are other sectors that are recovering from a sharp downturn from the COVID pandemic, such as Tourism and Leisure. There are other sectors that have been mainstream for M&A for years such as Healthcare, and Technology, all these sectors will see a very strong M&A activity.

...an immense amount of money that private equity have at their disposal for doing transactions... 

There is another reason which makes us look at bright side of the of M&A which is the amount of money, an immense amount of money, that private equity have at their disposal for doing transactions. Money will continue to flow into this private equity as they have proven to be very competitive as an investment in terms of returns.

Fernando Cabos, Albia Capital, IMAP Spain

I think there are two factors that will still be there for the next 12 months; one is monetary policy, there's still a lot of money pending to be invested worldwide.  There is another factor that's particular to the Spanish market, which is there are still a lot of companies that are small and medium size and there is still a lot of succession to be made with a lot of entrepreneurs are getting into their retirement age. Those companies have to grow, they have to integrate vertically, they have to gain size, and one of the main ways that you gain size, you get bigger in this market - in the Spanish market - is through M&A.

Aitor Cayero, Albia Capital, IMAP Spain

GERMANY

Currently, we see relatively high uncertainty for companies with global supply chains or dependencies on commodity price developments, such as in the Automotive or Mechanical Engineering sector. But we also see that our typical family run companies in Germany are currently relatively crisis proof, have reacted flexibly and hence are relatively resilient. I believe there will be an increasing need for equity solutions within some Industrial sectors, especially in restrictive banking environment, which we are currently have for companies already being heavily affected by the COVID pandemic with skid marks in the balance sheet.

…there will be an increasing need for equity solutions within some industrial sectors…

We may see more distressed deals in the next 12 months, but we expect that high growth sectors such as Healthcare, Medical Technology, Software, IT services or E-commerce will continue to see strategically motivated highly valued deals. This of course, assumes balanced interest rate policy from the central banks in order not to be shake up the global economy. If this continues to succeed, we will see a challenging but still a good M&A year in Germany for 2022. 

Henning Graw, IMAP M&A Consultants AG, IMAP Germany

Over the next 12 months we expect promising M&A activity in Germany as the underlying drivers remain intact. We still have a very high number of succession issues that need to be solved. We have a lot of growth companies that require growth capital to achieve their goals. We also have a tendency towards shorter holding periods of financial investors but also private investors, which will also drive M&A activity. So despite the overall macro economic or socio political developments, we all remain quite optimistic that the M&A market in Germany will be quite hot in 2022.

Nils Keller, IMAP M&A Consultants AG, IMAP Germany

We still see our high number of transaction in the mid-market segment in particular, the Technology sector as well as the Healthcare sector will be winners. In general. I'm quite optimistic that the current situation or the current M&A activity will go on for the next 12 months.

Andreas Widholz, IMAP M&A Consultants AG, IMAP Germany

SOUTH AFRICA

There's a lot of uncertainty in the world. And there's a lot of uncertainty in the market at the moment. We are coming out of a period of uncertainty because of the global pandemic. Now that period of uncertainty actually proved to be a good time for the M&A market, it's a good time for deal making.

...there's a lot of uncertainty in the market and we have to be there to support our clients to get the best possible result...

There's a lot of disruption to the economy, a lot of different industries that were rising up and other industries being challenged and actually proved fertile conditions for our business. We're facing new challenges now, and there's a lot of uncertainty in the market and we have to be there to support our clients to get the best possible result in each and each and every scenario that arises. 

Edmund Higenbottam, Verdant Capital, IMAP South Africa