430.00

380.00

330.00

280.00

230.00

180.00

130.00

2022:achallengingyearforDigitalCommerce

SeismicshiftsinDigitalCommerce

Today,e-commerceaccountsforalmost$1trillioninannualretailsalesintheUS,or13%ofthetotalretailindustry.Onagloballevel,e-commerceisnowworth$5trillion.

Beyondwell-knownmarkethegemonslikeAmazonandAlibaba,tremendousgrowthine-commercethroughoutthe2010spropelledtheriseofmanybigwinnersinthetechstockmarket.

Then,in2020,Covid-19causedseismicshiftsindigitalcommerce,forcingnear-totalrelianceondigitalandonlineretail.

Thisexacerbatedtheexistingshifttodigitalcommerce,drivingtechstockgrowth.Italsodroveawaveofmegacapitalraises,asventurecapitalandgrowthequityfirmswerefloodedwithlargeamountsofdrypowdertospendonhigh-growth,highlysuccessfulCovidplays.

56%

80.00

Sep'16Sep'17Sep'18Sep'19Sep'20Sep'21Sep'22

EvolutionoftheGlobalOnlineRetail“GLORE50”indexshareprice,2016-present

Mid-yearmarketcorrections?

Theyear2022hasseenhugechangesintheDigitalCommercemarket.AsCovid-19restrictionsloosened,spendingpatternsshiftedawayfromonlineretailandbacktobrick-and-mortarstoresandservices.Morebroadly,Q12022sawseveralgeopoliticalandmacroeconomiceventsmaketheheadlines,includingpost-pandemicinflationarypressures,armedconflictinUkraine,brokensupplychains,andcentralbankshikinginterestratesinanattempttocurbinflation.

InMay2022,thevalueofe-commercestocksplummeted.Then,ina“negativeflywheeleffect”,manyotherindustrieslinkedtoonlineretailande-commercesawasharpdeclineinmarketcapitalisationorvaluation–forinstance,consumerfintechslikeKlarna,whosevaluationdropped85%betweenJuly2021andJuly2022.

WhatdoesthismeanforDigitalCommerceM&A?

Between2020and2021,marketconditionsmeanthatmanysuccessfulDigitalCommercestartupswerefacedwithfouroptions:(1)gopublic;(2)gopublicviaSPAC;(3)raiseanother$500m;or(4)exitthroughM&A.

Nowthatthefirstthreeoptionshavedriedup–lowermarketconfidencemeanshesitantpublicmarketsandcautiousfinancialsponsors–webelievewewillseeavividbuttransformeddigitalcommerceM&Amarket.

1|10DigitalCommerceM&AOverview2H2022

M&A

summary

DigitalCommerceM&Avolumesbacktopre-pandemicnormal

Between2020andearly20222,ourM&AanalysisoftheDigitalCommercesectorshowedtransactionvolumesbreakingrecordswitheverynewquarter.PropelledbyCovid-19andaphenomenalinvestmentfrenzy,thesectorsawover2,300dealsin2021–a38%increaseon2020figures(1,722deals)andawhopping70%increaseon2019figures(1,397deals).

Butwhilenumbersshotupinthefirstquarterof2022againstallodds,thingstookasharpturninQ22022.

InQ2,werecordedamere544deals–asteep,22%dropfromQ1figures.InQ3,wenotedafurtherdeclineindeal-makingas410dealswereannouncedinthespace–a25%dropfromQ2figuresanda41%dropfromQ1.

Yetthesefiguresappearrelativelystablecomparedtothevolumesseenbeforethe2020/21bubble:forinstance,the410dealsseeninQ32022arehigherthanthe385dealaveragewesawbetween2016and2019.

Itappears,therefore,thatthehithasknockedM&A

volumesbackto“normal”pre-pandemiclevels.

TotalnumberofDigitalCommerceM&Atransactionsbyquarter,2016-2022

700

600

500

400

300

200

100

-

699

-22%

644

606

571

560

549

544

-25%

448445453424420407373356326408358368324319392351461324377410

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3201620162016201620172017201720172018201820182018201920192019201920202020202020202021202120212021202220222022

3,879

Numberofactiveacquirersin

thepast30months

12%

Shareofactiveacquirersthat

made>1acquisition

2|10DigitalCommerceM&AOverview2H2022

TopacquirersofDigitalCommercetargets,2020-22

Acquirers

in

30

months

Acquisitions

13

ThreemostrecentDigitalCommerceacquisitions

MacGregorPartners,LLCSCMSaaS&consultingservices

SinnerSchraderAktiengesellschaftdigitalagency

KingJamesGroupPtyLtddigitalmarketingservices

11

flexEngageInc.POS&marketingautomationSaaS

PiggyLLCcoupons&paymentsdesktopbrowserextensions

PriceRunnerInternationalABpricecomparisonplatform

9

XandrInc.digital&televisionadvertisingtechnologyplatform

TwoHatSecuritychatcontentdetection&moderationAPI

TakeLessonsInc.onlineinstructordirectory

8

PodsightspodcastadvertisinganalyticsSaaS

ConvertKitLLCemailmarketingplatform

WhooshkaaPtyLtdpodcastingSaaS&services

8

DualShockersdigitalgamingcommunitywebsite

TopSdigitalautomotivepublication

BusyPixelMedianews&reviewswebsites

7

MANYSAS[dbaThreader]Twitterthreadmanagementapplication&serviceBroadsheetInc.[dbaBrief]newsaggregationmobileapplication

ScrollLabsInc.onlinejournalismsubscriptioncontent

7

TractionSalesandMarketingInc.Salesforceconsulting,software&servicesAtonite-commercemarketplaceSaaS

LevelJumpSoftwareCorp.salesenablementSaaS

7

FJSTechPrivate[dbaRheoTV]videogamestreamingSaaS

CoursavyTechnologiese-learningplatform

OnoLabs[dbaMastree]e-learningservices&applications

3|10DigitalCommerceM&AOverview2H2022

Source:451Database,S&PCapitalIQ,HampletonResearch.

'21

Subsectorbreakdown

Shareofdealcountbysubsectorin1H2022

30%

26%

12%

14%

18%

InternetServices&Portals

Digitalcommerceservices,analysis&referenceproviders,onlineadvertising,directories,search,exchanges,education.

DigitalCommerceSoftware

Digitalmarketingande-commercesoftware,CRM,advertising

enablement,marketingautomation.

Agencies&ServicesProviders

Mobile&webmarketing,e-mailmarketingandmeasurement,

campaignmanagementservices,webdesign&development.

Media,Social&Gaming

Socialnetworking,onlinegames,e-sports,entertainment,online

communities,video,blogs,music,newscontent.

OnlineRetail

E-commerceretailers,onlinemarketplaces,classifieds,auctions.

TotalnumberofM&Atransactionsbysubsector&byquarter,2016-2022

250

200

150

100

50

-

Q1

'16

Q2

'16

Q3'16

Q4'16

Q1Q2Q3Q4Q1Q2Q3

'17'17'17'17'18'18'18

InternetServices&PortalsMedia,Social&GamingDigitalCommerceSoftware

Q4

'18

Q1

'19

Q2'19

Q3'19

Q4'20

Q1'21

Q2'21

Q3'21

Q4Q1Q2Q3

'19'20'20'20

OnlineRetail

Agencies&ServicesProviders

Q4

'21

Q1'22

Q2'22

Q3

‘22

ThesubsectorbreakdownofDigitalCommercedealschangedafteranintense2021andaboomingQ12022.InQ12022,theInternetServices&Portalssawanotherhugespikeindealvolume,asdidtheDigitalCommerceSoftwaresegmentase-commercesoftwarecompanieswasinhighdemandtopowertheboominonlineretail.However,transactionvolumeintheOnlineRetailsegmenthasbeenonthedeclinesincethelatterhalfof2021.Similarly,Media,Social&GaminghasseenasteadydeclineintransactionvolumesinceQ42021.

4|10DigitalCommerceM&AOverview2H2022

Interestingly,whileoursubsectorbreakdownaverageacrossthefirsthalfof2022showsmoredealstargetingcompaniesintheInternetServices&PortalsandDigitalCommerceSoftwaresegments,thishaschangeddramaticallyinQ32022:allfivesegmentsarenowseeingroughlyequaltransactionvolumes.

Source:451Database,S&PCapitalIQ,HampletonResearch.

Jan2022

ACQUIRED

Notdisclosed

Feb2022

ACQUIRED

Notdisclosed

Jul2022

ACQUIRED

$25million

Jun2022

ACQUIRED

$200million

DigitalCommerceSoftware

Dealactivityseesrapiddecline

TransactioncountintheDigitalCommerceSoftwaresegmenthasseenpeaksandtroughsthisyear.Owingtopandemictailwinds,Q12022saw50%moredealsthanQ42021,and100%moredealsthaninQ12021.Sincethispeak,however,thenumberofdealshasdippedsignificantly,withonly91dealsrecordedinQ3comparedto188dealsinQ12022.

at3.3xandtheEBITDAmultipledroppingto10.7xbytheendofQ22022.

Aswastobeexpected,withamoreguardedapproachtotheeconomyandinthefaceofarumouredrecession,confidenceinonlineretailanddigitalcommercespendinghasdeclinedslightly,affectingdealnumbersforDigitalCommerceSoftware.

Meanwhile,valuationshavedippedcorrespondingly,

withthetrailing30-monthrevenuemultiplecomingin

200

180

160

140

120

100

80

60

40

20

-

15.7x

12.5x12.5x12.8x12.5x

4.2x

3.3x

2.1x

16x

13.4x13.4x13.4x13.4x

14.6x14.6x14.6x

10.7x

4.5x

2.0x

2.7x

2.9x

25x

16x

3.6x

33x

33x

..

.

.

.

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3

'16'16'16'16'17'17'17'17'18'18'18'18'19'19'19'19'20'20'20'20'21'21'21'21'22'22'22

Source:451Database,S&PCapitalIQ,HampletonResearch.

Shiprockettargetslocallogistics&e-commerceSaaS

InJuly,Temasek-backedlogisticsstartupShiprocketannounceditwasacquiringArvindInternet’somnichannelSaaSOmuniforaround$25million,markingitsfifthdomesticacquisitionsofarthisyear.

Omuni,operatedbyArvindInternet,providesSaaSproductstoenablebrandstounifyinventory,order,catalogue,content,pricing,logisticsanddatamanagementacrossphysicalanddigitalstorefronts.Thecompanyenablesthedeliveryofonline/offlinecommercejourneysbetweenstores,warehousesanddigitalchannels.

Thedealcameamonthafterthethird-partylogisticsplayerannouncedtheacquisitionofPickrrforaround$200million.EarlierthisyearthecompanyalsoacquiredGlaucus,RocketboxandWigzo.Forfutureacquisitions,Shiprocketsaysitisbullishonengagingwithstartupsthatarecriticalpiecesoftheentirepost-purchasejourneyoftheconsumer.

5|10DigitalCommerceM&AOverview2H2022

OperatedbyBigfootRetailSolutions,Shiprocketwasfoundedin2017andpowersshippingandfulfilmentforSMEs,D2Cretailersandsocialcommercesellersacrossmultiplecategories.Itsshippingsolutionsarepresentacrossmorethan29,000zipcodeswithinIndiaand220countriesacrosstheworld.

InDecemberlastyear,ShiprocketbroughtinZomatoasaninvestor.Thecompanyhasraisedalmost$400millionsinceitsfounding,withPayPalVenturesandBertelsmannasinvestors.

Mar2022

ACQUIRED

$32million

200

180

160

140

120

100

80

60

40

20

-

Media,Social&Gaming

Dealvolumeladdersdown,valuationsstable

Overall,2020transformedtheMedia,Social&GamingM&Alandscape,withtransactionvolumesrisingandEBITDAmultiplesdroppingtoanewplateau.Transactioncountpeakedin2021,with314dealsrecordedinthesecondhalfof2021.

In2022thusfar,transactioncounthasabated,withonly220dealsrecordedinthefirsthalfoftheyear.Multipleshaveremainedstrong,withthetrailing30-monthEBITDAmultipleat10.6xandrevenuemultiplehavingcontinuouslyinchedupwardstoreach3.5xattheendofQ22022–roughlya25%increasesinceQ22020.

14.8x15.0x14.8x15.0x

14.0x13.4x

10.6x

100x

8.3x

7.5x

2.6x

2.4x

.

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3

'16'16'16'16'17'17'17'17'18'18'18'18'19'19'19'19'20'20'20'20'21'21'21'21'22'22'22

10.3x

100x

101x

2.6x

2.8x

2.8x

2.8x

2.6x

2.8x

2.7x

24x

3.1x

3.3x

3.5x

..

.

Source:451Database,S&PCapitalIQ,HampletonResearch.

FashionandsportforayintoNFTsandcrypto

InMarch,Web3technologyleaderCosmicWireacquiredDubai-basedArtsGaloreforcloseto$32million.ArtsGalore,aDubai-basedstreetartandNFTgallery,specialisesinfineartandone-of-a-kindcustomautomotivesanddevelopsNFTsforthe

Metaverse.

CosmicWireisaplatformagnosticWeb3companythatoffersbrands,celebrities,artists,andIPcollectorstheabilitytoenhance,promote,license,andselltheirwork.

Intheworldoffashionorautomotivecollectibles,NFTscanbeusedtoauthenticateproductsorserveascollectiblepiecesintheirownright.Thepastyearhasseenawaveofengagement,particularlyamongluxuryplayers.Fashionandartforayintothemetaversesuggestspromisingnewroutesforconsumerengagement.Whilenoonecanpredictexactlyhowthisrapidlygrowingdigitaluniversewillshapeup,theopportunitiesitpresentsareexciting—forluxurybrands,retailers,andconsumersthemselves.

6|10DigitalCommerceM&AOverview2H2022

InMay,Descrypto,apublicly-traded,adiversifiedNFTandblockchainholding,acquiredOpenLocker,asportsmarketingandtechnologystartupthathasdevelopedafan-friendlyNFTplatformforathletestomonetisetheirfanengagementwithinnovativedigitalcollectibles.

SportsNFTsgiveloyalfansnewandexcitingwaystosupporttheirfavoriteteams,whilesportsorganisationscanbenefitfromanewrevenuestreambyissuingdigitalcollectibles.

May2022

ACQUIRED

$11million

Domainsaystheacquisitionwillincreaseitsmarketcoveragefromapproximately35percenttocirca50percentofallAustralianpropertytransactions.

250

200

150

100

50

-

InternetServices&Portals

Dealvolumedropsdramaticallywhilevaluationstickup

Inthepasttwoyears,theInternetServices&PortalssegmenthasseenM&Avolumesfluctuatewildly.Thesegmentsaw212dealsinthespaceinQ12022,comparedtoonly155inQ22022andanevenlower76dealsinQ32022,signallinganendtotheM&Afrenzy.Thetrailing30-monthmedianrevenuemultipleremainedstableat2.8x,whilethemedianEBITDAmultiplehasrisensteeply,reaching13.1xattheendofQ22022.

Thesegmentcoversdigitalcommerceservices,internetandappportals,directories,search,education,exchanges,analysisandreferenceproviders.Italsoincludesmarketdataandinformationservices,ascommerceandtraditionalbankingandfinancialservicestoolscontinuetoseeextensiveoverlap.

13.1x

12.3x

11.9x11.4x

11.0x11.2x

10.5x10.3x102x

28x

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3

'16'16'16'16'17'17'17'17'18'18'18'18'19'19'19'19'20'20'20'20'21'21'21'21'22'22'22

10.4x

11.9x

11.1x

11.7x

29x

2.9x

2.9x

2.8x

2.3x

2.3x

27x

3.2x

3.2x

3.2x

3.2x

3.3x

.

.

.

.

Source:451Database,S&PCapitalIQ,HampletonResearch.

ASX-listedrealestategiantexpandsfootprint

InApril,realestatelistingsaggregatorDomainHoldingsAustralia(ASX:DHG)soughttoexpanditstechnologicalprowesswiththe$180millionacquisitionofSydney-basedRealbase,arealestatecampaignmanagementtechnologyplatform.TofundtheacquisitionDomainannounceda$180millionraisethroughsaleofsecuritiesinthecompany.

Thelistedrealestatecompany,whichprimarilyoperatespropertysearchsiteD.au,saystheacquisitionisa“significantstepforwardintheevolution”ofitsmarketplacestrategy.Establishedin2020followingthemergerofrealestatemarketingtechnologybusinessesCampaigntrackandRealhub,RealbaseisthelargestcampaignmanagementplatformintheAustralianandNewZealandmarkets,providingservicestoagentsonapproximately40percentofallpropertytransactionsintheregions.

7|10DigitalCommerceM&AOverview2H2022

Theplatformenablesrealestateagentstoconstruct,price,orderandtrackcampaignmarketingproductsrequiredtolistandmarketaproperty,includingmanagingthetotalmarketingscheduleofalisting,theproperty’svisualcontent,aswellassignboards,brochures,flyers,andsocial&printmediaadvertising.

Apr2022

ACQUIRED

$172million

Feb2022

ACQUIRED

Notdisclosed

Sep2022

ACQUIRED

Notdisclosed

Agencies&ServicesProviders

Dealvolumeincreases

Acquisitionstargetingagenciesandserviceprovidersgrewinthefirsthalfof2022,with153dealsclosedinthespacecomparedto123in1H2021.Thetrailing

30-monthmedianrevenuemultipleremainedstableat1.2xwhilethe30-monthtrailingmedianEBITDAmultiplecameinat7.5x.

100

80

60

40

20

-

13.8x

13.2x

12.1x

10.

9.0x

7.5x

7.1x

6.0x

5.0x

1.6x

1.2x

12.1x

8.4x

1.2x

1.2x

1.6x

1.3x

1.1x

1.7x

1.7x

1.2x

1.2x

1.7x

1.4x

7.7x

7.7x

7x

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3

'16'16'16'16'17'17'17'17'18'18'18'18'19'19'19'19'20'20'20'20'21'21'21'21'22'22'22

Source:451Database,S&PCapitalIQ,HampletonResearch.

WPPacquisitionscontinue,targetingnewgeographiesandhotverticals

Thisyear,world-famousdigitalcommerceservicesgroupWPPhasaddedtoitscorporatetree.

InFebruary,itacquiredVillageMarketing,aUS-headquarteredconsultancyspecializingininfluencermarketingandcreatoreconomypartnerships.Foundedin2013,thecompanycounts150employeesandhasledbrandpartnershipsforthelikesofNike,EquinoxandSoulCycle.WiththeriseofplatformslikeTikTokandthegrowingimportanceofsocialcommerce,marketersandagencies–particularlyglobalagencyholdingcompanieslikeWPP–arecompelledtolooktotheinfluencereconomytostayrelevant.

Later,thecompanyacquiredLatinAmericane-commerceagencyCorebizforanunspecifiedamount.CorebizspecialisesinVTEXimplementationandemploysaround600peoplethroughoutSouthAmerica,withmostofthembasedinBrazil.ItcountsUSretailerWalmart,FrenchsportsretailerDecathlonandNewYork-basedEsteeLauderamongstitsclients.TheacquisitionaimstostrengthenWPP’sSouthAmericandigitalcommerceandVTEXcapabilities.

8|10DigitalCommerceM&AOverview2H2022

Morerecently,WPPacquiredNewcraft,aEuropeane-

commerceconsultancybasedintheNetherlands,to

strengthenonlineretail

capabilitieswithin

WundermanThompson.

Foundedin2007andwith

155employees,Newcraft

servesclientssuchas

AholdDelhaize,Pon

HoldingsandYakult.

Jul2022

ACQUIRED

Notdisclosed

Jan2022

ACQUIRED

Notdisclosed

180

160

140

120

100

80

60

40

20

-

OnlineRetail

TransactionsinOnlineRetaildwindle

TheOnlineRetailsectorhasseenfluctuationindealvolumesoverthepasttwoyears.SincetheM&Aspikeinthemiddleof2021,transactionvolumehascontinuedtodecline,with179dealsclosedin1H2022comparedto247in1H2021.Meanwhile,medianvaluationshave

remainedstablesince2020,withthetrailing30-monthmedianrevenuemultipleat1.4x–showingthatthesectorisstillvaluedasamaturemarket–andthecorrespondingEBITDAmultipleremainingatastable

10.9x.

14.9x14.3x14.5x

12.4x

11.6x

10.9x

10.5x

100x

0.8x

.

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3

'16'16'16'16'17'17'17'17'18'18'18'18'19'19'19'19'20'20'20'20'21'21'21'21'22'22'22

10.0x

14.5x

10.9x

14.2x

14.5x

07x

1.2x

1.2x

1.0x

1.0x

1.0x

1.1x

1.0x

1.4x

1.4x

1.4x

1.0x

.

Source:451Database,S&PCapitalIQ,HampletonResearch.

PetsuppliesretaillivesonbeyondCovidspike

InJanuary,A&MCapitalPartners-backedWorldwisemadetwonotableacquisitionsinthepetretailspace.

Worldwise,headquarteredinCalifornia,isaleadingplatforminthepetsuppliesmarket.Itoffersabrandedone-stop-shopsolutionservingthemajorityofpetsupplymerchandisingneedsandprovideseco-sustainableproducts.

ItacquiredKittySift,aleaderinthecatlitterandaccessoriessegment.HeadquarteredinMinnesota,KittySiftisabrandedleaderintheNorthAmericaneco-sustainablecatlitterandaccessoriesspace,providingcreativesupplychainsolutionstobothe-commerce-centricbusinessesandomnichannelbrickandmortarretailers.

Worldwise’sacquisitionofKittySiftfurtherenhancesitsomni-channelpresence,addinginnovativecataccessoriestoanalreadyrobustproductportfoliooftoys,petbeds,chews,catproducts,travelaccessoriesandotherkeycategories.TheadditionofKittySiftmarksWorldwise’ssecondacquisitioninthelastmonth,addingcomplementaryproduct,aswellasbrandandmanagementresources,totheplatform.

9|10DigitalCommerceM&AOverview2H2022

Inanotherdeal,WorldwiseacquiredFurhavenPetProducts.HeadquarteredinWashingtonState,USA,FurHavenisaleadingNorthAmericane-commerceplatformforpetaccessories,includingbedding,homeandtravelsupplies,apparelandmore.FurHavenisalsoaninnovatorinbrandedproductdevelopment,providingcreativesupplychainsolutions.

Globally,thepetcaremarkethasgrownto$261billionin2022;upfrom$245billionin2021.Anestimated6.1%compoundedannualgrowthrate(CAGR),willcatapultthatfigureto$350billionby2027.

Jan2022

ACQUIRED

Notdisclosed

10|10DigitalCommerceM&AOverview2H2022

Conclusion&Contacts

Sincetheendof2020,wehavereportedrecordafterrecordtransactionvolumes

inDigitalCommerce.OurmostrecentanalysisshowsthatQ12022markedthe

lastspikeindealvolume,beforedigitalcommercedealmakingsloweddownin

Q2andQ32022.

RalphHübner

SectorPrincipal

ralph.huebner@

Theyear2022hasseenhugechangesintheDigitalCommercemarket.As

Covid-19restrictionsloosened,spendingpatternshaveshiftedawayfrom

onlineretailandbacktobrick-and-mortarstoresandservices.Inaddition,

variousmacroeconomicandgeopoliticaleventshavecreatedaverychallenging

environmentfordigitalcommerce.

Theseturbulenttimeshavemarredthevalueofdigitalcommercestocksand

influencedfundraisingvaluations.

Inourexperience,however,eveninturbulenttimes,thereisalwaysanM&Amarket.Evidently,transactionvolumesacrossallsubsectorsaredownfromtheir2021/2022peaks.Butwenotethatthesevolumesareonparwiththepre-

pandemicnormal,andwebelievetheDigitalCommerceM&Amarketwillregainsomestrengthin2023.Meanwhile,thedriversofandcriteriaforM&Aactivityinthespacewilllikelyundergosometransformation.

Firstly,lesstrafficinM&Adealpipelinesandfewerfundraisingattemptsoverallmayallowcompanieslookingtosellorraisefundstostandout–anear-impossiblefeatoverthepasttwoyearsamidanovercrowdedmarket.

Secondly,financialsponsorswillcontinuetodrivemanydeals,astheyarestillsittingonhugeamountsofdrypowder.Yetastheyareaffectedbybroadermarketdipsandasinterestratesclimb,overthenext18monthstheywilllikelybemoreselectivewiththeirinvestmentsandmoreconservativewithvaluations.

Similarly,strategic“winners”willcontinuetobuy,butforthosefocusingontheircorebusinessandsufferingfromadipintheirstockmarketvalue,frugalitywithvaluationsandaselectiveinvestmentstancewillbedujour.

Ourcurrentanalysisdo