Inside the Record Year in M&A

M&A deal value skyrocketed in 2021, eclipsing all previous records by a long shot. Companies must take steps to bolster their capabilities and meet the market's rising demands. Suzanne Kumar, vice president of Bain’s M&A and Divestitures practice, and Andrei Vorobyov, a partner with the practice, discuss the complex trends of the past year—and how business leaders can compete in 2022.

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State of the M&A Market

As markets take off, strategic acquirers are evolving to meet new challenges.

Read a transcript of the video below:

SUZANNE KUMAR: 2021 was a white-hot year for dealmaking, and M&A has become more complex than ever. Financial investors, SPACs, and venture capital experienced tremendous growth. 

ANDREI VOROBYOV: Strategic M&A also had a remarkable year. Deal value was up almost 50%, while record-high valuations raised the bar for success.

KUMAR: Alternative deal activity also dramatically increased, as strategic buyers pursued more joint ventures, partnerships, and corporate venture capital than ever before. 

VOROBYOV: In reversal of recent trends, scale deals were more common than scope, likely reflecting buyers' focus on strengthening core businesses and taking advantage of opportunities in the market.

KUMAR: Of course, the question is: Can M&A continue at this pace? Bain's overall outlook is optimistic. The fundamentals for dealmaking are still attractive. A well-balanced mix of market signals suggests momentum is not slowing down. And in order to compete, strategic M&A teams will need to expand their toolkit.

VOROBYOV: They'll need to elevate talent. Talent is a critical success factor for deals. And today's hot labor market requires a new focus on retention challenges. 

KUMAR: They'll need to better identify, quantify, and capture revenue synergies to justify record-high deal multiples. 

VOROBYOV: They'll need to broaden their M&A playbook to account for new business needs. Alternative deals, such as JVs, require a distinct approach. Meanwhile, ESG is quickly rising in importance to dealmaking, and as a potential source of value. 

KUMAR: Today's buyers face an M&A environment that demands more from them than ever. Our latest report shows that, even in today's complex market, dealmakers can meet these challenges, and get M&A right.

Explore the full report

M&A Report 2022

What the best companies did to win in a white-hot market.