M&A in 2022 ‘buoyant’, says Ciesco, despite volatility

M&A activity in the technology, digital, media, and marketing spaces remained strong in 2022 despite global volatility, the specialist advisory firm Ciesco has said.

Though the last year involved the war in Ukraine, supply chain issues linked to Covid and China’s shutdown, and a massive economic downturn, there were 2,095 transactions within tech, digital, media, and marketing – a year-on-year increase of 20%.

Specialist M&A advisory firm Ciesco, who tracked the transactions, said that the USA and the UK were the most active M&A markets in 2022, logging 888 and 293 deals respectively. Activity in the USA and UK made up 56% of all global deals.

The firm’s Annual Global M&A Review showed it was also a busy year for M&A in France, Germany, Australia, and Canada, who followed the USA and UK in terms of deal volume. APAC saw the greatest year-on-year increase. M&A activity climbed 92% from 2023.

Chris Sahota, Founder and CEO of Ciesco, said though few anticipated the events of 2022, M&A activity in the tech, digital, media, and marketing sectors ‘remain buoyant’. He was was optimistic that this would continue throughout 2023, despite high inflation, cost-of-living challenges, and uncertainty surrounding the war in Ukraine.

‘2022 saw a dramatic negative shift in macro conditions and in outlook, but many business leaders adapted,’ he said.

‘Those in the habit of re-imagining their ways of working due to the pandemic were able to translate the challenges of 2022 into opportunities to accelerate their business transformation programmes.

‘The kind of resilience and adaptability will become a key focus of all businesses in our specialist sectors in 2023.’

Ciesco noted that another clear constant in M&A throughout 2022 was the major activity of Private Equity buyers. The number of global Private Equity-backed deals recorded by the firm climbed 11% from the year before, and PE buyers accounted for 42% of all deals.

Sahota’s market intelligence team recorded especially high M&A activity in the digital media, martech and digital agency sub-sectors. These were the main sub-sectors of investment by PE buyers, amounting to 56% of all the deals executed. The most active PE buyers and backers in the sector were Carlyle Group with 13 deals, and Providence Equity Partners, Kohlberg Kravis Roberts and Providence Strategic Growth with eight deals.

There were 11 deals above the $1 billion threshold in 2022 – a decrease on the 33 seen the year before. There were three ‘mega deals’, involving values of more than $10 billion. Evergreen Coast Capital led a consortium to acquire the American data and market measurement company Nielsen for $16 billion, the highest-value deal in 2022.

The Annual Global M&A Review also cast light on companies in the healthcare and sustainability sectors, which have become highly acquisitive following the Covid-19 pandemic due to the increased importance of quality and preventative healthcare, and boardroom pressure relating to addressing environmental issues.