M&A sector deals on the up again says Ciesco but holding companies give way to private equity

M&A advisory firm Ciesco has released its 2021 Global M&A Review & 2022 Outlook for media and technology firms, showing that last year 2021 deals were transacted, a 60.1% rise on Covid-hit 2020 and 29.9% on 2019.

The total announced value of M&A deals with disclosed transaction values in 2021 stands at $87.0bn, excluding mega-deals worth over $10.0b – up 56% from 2020.

33 acquisitions worth over £1.0bn were made in 2021, climbing from just 13 in 2020 and outpacing pre-pandemic levels.

Digital media, martech and digital produced the highest deal volume once again, with a combined value of 47% of all 2021 deal activity. Private equity firms were the biggest buyers.

The US and UK were the busiest markets in 2021, with 771 and 230 deals respectively. Western Europe’s overall deal activity grew 72% year-on-year, with France, Germany, Canada and the Netherlands all making strong gains.

Ciesco says: ’PE buyers further increased their penetration of the technology, digital, media and marketing sectors. Collectively on a global basis, PE buyers accounted for 45% of all transactions by number in 2021, ahead of the previous peak of 42% in 2019, almost doubling in deal count on 2020 and way ahead of five years ago – which was below 15%.

“The number of transactions includes PE funds making new ‘platform’ investments and follow-on transactions supporting their existing portfolio companies.’

By contrast the big ad holding companies have pulled in their horns. Ciesco says: “Only 14 transactions were posted from the Big Six, a decrease of 7% compared with 2020. This trend is exacerbated as a comparatively buoyant M&A year of 2019 saw the Global Holding Networks make 26 acquisitions.

“So if we overstep the COVID-19 year of 2020, the decrease in their transaction appetite was reduced across a 2-year period by practically 58% with activity way below their halcyon days including 2016 when they executed 95 transactions overall.”

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