By Michelle Ritchie, PwC US industrial products deals leader
We see incredible growth and investment opportunities across the industrial-manufacturing sector. In the second half of 2021, the optimism that we had turned the corner on the worst of the COVID-19 pandemic fueled a strong resurgence in economic and mergers and acquisition (M&A) activity.
However, the pandemic continues to impact the markets.
Based on findings from PwC’s end-of-year Deals Day Report, we expect supply-chain risks and policy shifts to remain top-of-mind for stakeholders as we move into 2022. The rebound in M&A activity in 2021 was largely fueled by companies investing inorganically to drive scale, expand product portfolios and extend into new markets.
These trends will remain critical as consumer behavior shifts—accelerated by COVID-19—are sustained beyond the pandemic.
While aggressive deal multiples could potentially temper buyer’s interests, these multiples have drawn out more sellers, including private-equity firms looking for an earlier exit and corporates hoping to monetize non-core assets, large and small.
As the market looks forward to 2022, the looming mid-term election and recent policy shifts (including in the tax arena) are ever present in strategic planning and positioning.
We expect M&A activity to remain strong in 2022 as companies and private-equity firms seek acquisitions and divestitures ahead of elections—and as founders eye exits ahead of any possible changes in the tax regime.
