M&A reached a record pace by the end of 2021 and has yet to show signs of slowing. A variety of factors drove heightened deal volume in 2021, including aggressive M&A strategies by financial and strategic buyers, record levels of private equity dry powder available in the market, strong sales and earnings performance by many companies, and persistent threats of capital gains tax increases (which turned out not to materialize). Leveraging these tailwinds, Intrepid closed 2021 with a record $4.5 billion in aggregate transaction value across 34 deals.
Within the industries our Commercial & Consumer Technology (CCT) team follows, the themes from 2021 continue into 2022. Consumer demand remains robust, yet companies continue to struggle (or have to invest more capital) to meet demand due to supply chain disruptions, rising freight and input costs, and challenges securing adequate labor. As a result, companies are reporting inflated order backlogs, higher working capital balances, and lower gross margins. Many are also rethinking their supply chain processes and go-to-market strategies to adapt to current conditions and better position themselves in the market.
As we look ahead into 2022, our M&A pipeline across the sectors we cover remains robust and acquirers remain hungry for new opportunities. If you are interested in learning more about what is going on in the markets, potential M&A, or capital raising options for your business, please do not hesitate to reach out.
Managing Director, Head of Commercial & Consumer Technology