Record M&A activity in Ireland, north and south, predicted to continue in 2022 in a sellers’ market, according to KPMG survey

Posted By:
KPMG Belfast

24th Jan 2022

  • 58% of M&A leaders expect higher deal volumes in 2022, following a record year in 2021
  • 73% expect deal multiples to increase in 2022
  • 75% say 2022 will be a sellers’ market as buyer competition intensifies
  • Skills gaps called out as the main threat to deal activity – followed by rising inflation and political change
  • Only 1 in 10 consider Brexit as a threat to dealmaking in 2022
  • Financial vs strategic buyers expected to lead the charge in deal activity
  • ESG agenda continues to be of significance to M&A strategy


19 January, 2022: Record levels of merger and acquisition (M&A) activity are predicted to continue across the island of Ireland in 2022 according to KPMG’s annual M&A Outlook survey. The survey of over one hundred leading M&A executives and advisors in NI and ROI found that a majority (58%) expect 2022 deal volumes to increase above 2021 levels, and a further 41% expect deal levels to remain at buoyant 2021 heights. Just 1% expect a decline in deal volumes this year, signalling strong business confidence despite the ongoing impact of Covid-19.

Sellers’ market

Three quarters of respondents (75%) anticipate that 2022 will be a sellers’ rather than a buyers’ market, likely to be driven by continued competition for high quality target companies amongst both international and domestic investors.

In a further vote of confidence for M&A activity across the island this year, particularly those selling, a significant majority of those surveyed (83%) say they intend to pursue M&A opportunities in 2022 and almost 3 in 4 respondents (73%) expect deal multiples / pricing to increase in 2022.

Predicted deal activity

M&A leaders expect deal activity in Ireland, north and south, in 2022 to be led by financial rather than strategic buyers, with 57% saying they expect financial buyers, i.e. private equity, to complete the highest volume of transactions in Ireland in 2022, versus 43% for strategic buyers. This is perhaps reflective of the asset classes’ increased prominence following many recent successful private equity transactions and the availability of capital due to significant private equity fundraising activity globally.

When asked what factors could negatively impact dealmaking, respondents cited human capital / skills gaps (39%), concerns regarding inflation (25%), political change (15%) and rising interest rates (11%) to be the primary factors likely to inhibit deal activity in 2022. Interestingly, just 10% considered Brexit to be a factor that could potentially negatively impact deal activity this year.

Aligned with previous years, technology and healthcare are expected to be the most active sectors for M&A activity in 2022, with energy and infrastructure predicted to be the third most active sector. In a change from last year, the retail sector was predicted by just 3% of respondents to be the most active sector in 2022, compared to 12% in last year’s survey.

ESG agenda

The sustainability agenda continues to increase in significance for dealmakers, with 92% of respondents saying they intend to factor sustainability into their 2022 M&A strategies, compared with 86% in 2021 and 67% in 2020 – a 25% increase in just two years. Environmental, Social and Governance (ESG) factors will continue to impact decision-making as operating models become subject to more stringent sustainability requirements under proposals such as the EU’s Corporate Sustainability Reporting Directive (CSRD), which will impact 2023 reporting periods for companies falling under its remit.

Commenting on the survey finding, Russell Smyth, Head of Deal Advisory KPMG in Northern Ireland, said: “After a stellar 2021, Northern Ireland’s M&A market looks set to continue that trend in 2022. Dealmakers are optimistic of a continued uptick in deal volumes while sellers have raised their value expectations as buyers chase quality assets. Strategic investors are expected to remain prominent on the buy side, but it will be interesting to see how the expected increase in activity from financial buyers impacts the market in the coming months. Private equity is still flush with funding and will likely retain a competitive edge as 2022 unfolds.

“Of particular interest is the growing importance of the green agenda in the M&A market, one which is likely to gain in prominence in the coming years. Embedded sustainability is now demanded by investors, shareholders and regulatory bodies and those companies that fail to demonstrate that focus will be left behind.”

Chris Donnelly, Director, Deal Advisory, KPMG in Northern Ireland, said: “There is little doubt that 2022 will be a sellers’ market with both strategic and financial buyers remaining active. For those business owners considering a sale, ensuring a quality team and pipeline of talent is in place will be key as our survey shows the race for skills is one of the biggest challenges facing companies at present. Meanwhile, it is clear that funders – both traditional and non-bank – are keen to support the Northern Ireland M&A market on the back of robust fundamentals while interest rates will be one to watch for 2022 with any significant rises likely to temper buyer appetite.”