Although 2021 set record value and volume levels for M&A both globally and in EMEA, supply chain issues were the top reasons M&A deals fell apart in 2021, according to a new survey of 200 UK-based dealmakers by Datasite.
Every industry impacted
Close to two-thirds (64%) of UK dealmakers said inflation affected a deal on which they worked in 2021, including almost one in four (24%) who said it changed valuations, while 22% said it changed company operating assumptions and 17% said it caused a deal to fall apart.
Supply chain issues were another source of frustration for M&A professionals. Almost 20% of UK dealmakers said supply chain issues caused at least one deal to fall apart in 2021 and 22% identified supply chain issues as the top factor (22%) likely to sink an M&A deal in 2022.
“Last year was a record-breaking year for UK M&A, yet there have been challenges, including rising inflation, which is the highest it’s been in a decade,” says Merlin Piscitelli, Chief Revenue Officer for Datasite in EMEA. “Virtually every industry is being impacted, which explains the ongoing discussion of targeted measures by the government to address the situation.”
Clear appetite for activity
Still, UK dealmakers expect activity to remain high, and 43% said they expect deal volume to increase in 2022. “There is a clear appetite from financial institutions, businesses and investors to take part in M&A deals, and while inflation and supply chains do pose some challenges, dealmakers are confident that there are M&A opportunities to pursue,” says Piscitelli.
Download the global infographic for more survey results.