Trend: ‘Plenty of Dry Powder’

Private equity firms have a lot of cash lying around right now and they are eager to invest it. As Rusty Wiley, CEO of Datasite put it, “Deal activity in 2022 is expected to continue to be strong, buoyed by favorable interest rates and plenty of dry powder in the way of private equity cash piles.”

PwC experts say private equity firms accounted for 37% of U.S. deal volume through mid-November. That amounted to 28% more than 2019 and 24% more than 2017.

With that in mind, M&A this year will focus on growth, Datasite’s Wiley added — whether organic growth or increases that come of “revenue synergies,” he said.

“Transformational deals will no doubt continue in 2022, especially as companies seek to future-proof their businesses,” Wiley wrote. “Yet many dealmakers are expecting to acquire new businesses, especially products, services or markets, to expand a company’s revenue and profit.” 

Expect private equity companies to stay hungry to “deploy capital to emerging and established middle-market companies, particularly in industries that remain red hot, whether in tech, healthcare or ESG-oriented companies,” experts at law firm Hinckley Allen say.