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2022 Q2 M&A Activity Update

Friday, October 7, 2022

Reprinted with permission from WIPFLI Corporate Finance Advisors, LLC

The mergers and acquisition (M&A) industry has seen record-breaking numbers in 2021. Recent events (such as the war in Ukraine and supply chain uncertainty) brought on many challenges for the industry in 2022, but the data from the first two quarters show that M&A activity is still stronger than past years. For more information, please review these insights from WIPFLI Corporate Finance Advisors.

Merger & Acquisition Activity
  • The 2022 global M&A continues to slow down from a busy latter half of 2021, but Q2 2022 deal count remains strong comparatively to the same quarter in 2021.
  • Pitchbook reports that the North American deal market closed 4,571 deals worth a combined $547.7 billion, a decline of 20% and 18% respectively.
  • M&A activity faced some major headwinds this quarter, including geopolitical tension and supply chain uncertainty brought about from the COVID-19 pandemic.
  • Macroeconomic uncertainty was driven by reduced consumer spending due to lowered confidence because of rising Interest and Inflationas well as turmoil in the public market with the S&P 500 seeing Its biggest loss in the first half of a year since 1970.
  • Investors, both strategic and financial sponsors, are seeing the current volatility as an opportunity to find attractive growth prospects affected by this cycle.
  • Rising interest rates began to appear M&A debt in Q2, but the lower middle-market remained shielded from this as the average pricing of senior debt in the $10-50M TEV range remained in the low 4%s, while $50-250M TEV debt pricing rose more than 100 basis points.

North American Merger & Acquisition Activity

Total Enterprise Value (TEV)/EBITDA Quarterly Splits
TEV Q2 2021 Q3 2021 Q4 2021 Q12022 Q22022
10M-25M 5.8x 6.0x 6.2x 6.7x 5.8x
25M-50M 7.0x 7.6x 7.1x 6.7x 6.7x
50M-100M 8.2x 9.2x 8.5x 9.2x 9.1x
100M-250M 9.5x 9.5x 9.3x 9.1x 9.5x
Total 7.1x 7.6x 7.6x 7.5x 7.4x

The reported transactions per GF Data show, in aggregate, middle-market valuations declined only slightly from 7.5x EBITDA in Q1 2022 to 7.4x EBITDA in Q2 2022, with valuations remaining strong. The number and size of the transactions were significant drivers in the declining multiple.

North American Debt Multiples

Average debt utilization remained steady in Q2 2022 after seeing a slight decline in Q1, largely influenced by the rising interest rates. There was, however, a slight decline in the use of senior debt as buyers looked elsewhere to supplement their needs.

Manufacturing EBITDA Multiples by EV

$10M-$25M $25M-$50M $50M-$100M $100M-$250M

Private Equity Fundraising

After a record-shattering 2021, U.S. PE firms are sprinting to raise another fund in 2022, as fundraising is off to a record start in the first two quarters.

North American PE M&A Activity

M&A Buyer Activity by Buyer Type

Total M&A Activity


About WIPFLI Corporate Finance Advisors

Wipfli Corporate Finance Advisors, LLC is the investment banking and corporate finance arm of Wipfli LLP, a top 20 national accounting and consulting firm. Wipfli Corporate Finance offers tailored investment banking services for middle-market companies ($10-$250 million of revenue) and capital providers. We pride ourselves on earning our clients’ confidence through dedication to their strategic and transaction needs. Additionally, our clients benefit from the full suite of Wipfli’s services, including tax and accounting, which are critical components of the transaction process.

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.