New York, October 26, 2021 – SPS sponsored a webinar on Wednesday, October 20th titled, How Top Originators are Gearing up for 2022, moderated by David Toll of Private Equity Career Week.
CEO of SPS, Nadim Malik, joined Jeremy Holland of The Riverside Company, Christopher Petrossian of Lincoln International, and Scott Reed of Aberdeen Standard Investments for a 75-minute discussion on projected trends for deal sourcing in 2022. The panelists presented predictions on the comeback of the proprietary deal, how to maintain top-of-mind standing with intermediaries, emerging technology PE firms are adopting, and more.
Malik evaluated the state of the M&A market through the first three quarters of 2021, beginning with the boom in deal flow this year has seen. According to SPS data, PE deal activity has increased by a staggering 55% from the same period in 2020, and 25% from pre-pandemic levels in 2019. The trend toward buy-and-builds and rollups has continued to grow in 2021, with PE firms completing 2.3 add-ons per platform this year. The Service, IT, Healthcare, and Industrial sectors have led the way in Sponsor activity, while activity across all sectors have increased compared to last year. Deal flow in Q3 2021 is the highest on record, far surpassing even the previous record set in Q2. Thus, closed deal volume for the remainder of the year is expected to remain robust.
Malik also shared some key results of the SPS 2021 Deal Origination Benchmark Report (DOBR), which provides detailed analysis into a private equity firm’s deal sourcing strategy compared to its peers, allowing the firm to gauge its performance both individually and in the context of the industry at large. Each SPS client receives a custom DOBR comparing its market coverage against all private equity firms as well as to other firms in the same peer group, which are defined by deal sourcing strategy or size of deals sought. Firms also receive data-driven recommendations on how to best direct deal sourcing efforts going forward. Review key takeaways from this year’s report here.