Confirming a trend spotted by Campaign Asia-Pacific in late December (see "After a challenging 2020, M&A action sprung back to life in 2021"), UK-based advisory firm Ciesco's new M&A report has revealed that worldwide and across all industries, the number of transactions jumped 60% to 1,747 deals in 2021, compared to 1,092 deals in 2020 and a 30% jump over 2019, when 1,345 transactions were inked. Deal value, according to Ciesco, was up over 55% to $87 billion in 2021.
"The year 2021 began a period of re-invention for many companies following the extraordinary events of 2020," Chris Sahota, CEO of Ciesco told Campaign Asia-Pacific. Digitisation, data and technology drove the structural shifts in the technology and marketing services industries through 2021.
According to Ciesco's data, digital media, martech and digital agencies were the key focus areas for deal-making in 2021, representing nearly half of all transactions for the year. Martech and digital agency were of especial interest with activity up 90% and 110%, respectively.
Private-equity funds continue to be a major driver of the activity. According to data from Ciesco, PE buyers accounted for 45% of deals in 2021, compared to the peak of 42% in 2019 and 37% in 2020. Five years ago, this statistic was around 19%, according to this firm's estimate.
If PE funds had a blockbuster 2021 in the technology, digital, media and marketing sectors, holding groups had a quiet year. Collectively they posted just 14 deals in 2021, a decline of 7% versus the previous year. Discounting a Covid-ravaged 2020, the decline would be even steeper, Ciesco reckoned. The slowing activity is especially acute compared to a few years ago, when acqusitive networks made as many as 95 transactions in the year.
Consultancies too followed suit, with a 44% decline in deals for 2021, following on from a 30% decline the previous year. Even so, there was an appetite for strategy, martech and CRM from these consultancies, with Accenture being the most aggressive company in this segment, with eight deals, according to Ciesco.
Elsewhere, mid-market companies including the likes of Sir Martin Sorrel's S4 Capital had a reasonably busy 2021. According to data from Ciesco, S4 Capital closed 10 deals in 2021 and Stagwell Group, with six deals, doubled the number of transactions it closed in 2021 versus 2020.
Geographically, the US and UK were the busiest M&A markets in 2021, with 771 and 230 deals, followed by France Germany, Canada and The Netherlands. While Western Europe as a collective saw a 72% increase in deal activity, other markets also reported heightened activity, the deal advisory reported. Like 2020, cross-border transactions accounted for 36% of all deals in 2021 too.
Ciesco expects the frantic deal-making pace to sustain in 2022. "Business leaders will want to continue to adapt their companies to the new world and drive business transformation across all parts of their organisation—marketing, sales, commerce, customer service and supply chain procurement," Sahota said. "Private Equity are often reported to have over £1.7 trillion [$2.3 trillion] war chest of dry-powder globally to invest behind strong management teams.... 2022 will be an exciting year of new business models and data- and tech-driven change happening at an even faster pace."