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At the start of 2022, M&A activity continued to build off the record-breaking market we experienced in 2021. As the challenges of COVID-19 receded and a more “normal” world beyond the pandemic began to take shape, demand for commercial and consumer technology products was at all-time highs and many remained bullish about the market’s outlook. Intrepid saw a rise in deal flow and premium valuations as interest from investors and strategic acquirer with substantial capital at their disposal held strong. However, as the year progressed, rampant inflation precipitated interest rate hikes, consumers became more cautious, the war in Ukraine commenced (and continues), and recession talks gained momentum, all of which combined to create greater uncertainty in the market.
As a result of compounding market headwinds, some strategic buyers have put M&A efforts on hold to focus internally, and many financial sponsors have shifted to more conservative stances on valuation and transaction structure, resulting in fewer deals closing in Q2’2022. Nevertheless, we continue to maintain regular dialogue with strategic buyers and financial sponsors looking for opportunities to deploy capital to build out capabilities, acquire differentiated technologies, or expand market share.
As the market continues to adapt to the many opportunities and challenges associated with ongoing economic conditions, we remain bullish on our broader outlook across the spectrum of music technology, consumer electronics, professional A/V, residential technology, and security. If you are interested in learning more about the market or potential M&A or capital raising options for your business, please do not hesitate to reach out.
Gary Rabishaw
Managing Director
Head of Commercial & Consumer Technology
grabishaw@intrepidib.com