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2022 Market Outlook: Perspective from IBBA and M&A Source Chairs

2022 Market Outlook - https://gillagency.co

2021 has been a fantastic year with multiples reaching historic heights.  What are the predictions for 2022.  2022 should be a continuation of 2021.  The only change that may impact this prediction is the economy.  Depending on how the economy does in 2022 the market can go up or down. But if it remains stable we should see the same pattern as 2021.  

In 2022 a lot of attention will be put on businesses by the investors that thrived and survived greatly in 2021.  Investors are still making judgements on sellers exiting in this environment due to the pandemic. The investors will ascertain what the future looks like for the business post pandemic before committing to a deal.  

A lot of baby boomer business owners will be on the market in 2022. This is due to retirement and the opportunity that the current environment poses.  The lower middle market will continue to be seller’s market as the multiples hold steady in the upward trajectory.  Right business in the right market will have no problem getting multiple offers by various buyers.  

This is also driven because of the interest levels being low and PE firms (among other investor groups) having a lot of funds that needs to be deployed. Private Equity groups are going in with more cash down due to easier and less expensive access to capital for their add on acquisitions. 

Even though the multiples are higher the sellers/investors will need to finesse the deal with earn-outs, owner financing, equity sharing and the owner to stay on for a period of time to create a win-win situation.

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