They increase by 31%, a 971the operations of m&a in Italy in 2022 compared to the 742 deals in 2021 with targets in our country, for a value of approx 89.4 billion euros (+11%). This is what emerges from the report on investment trends in Italy “EY M&A Barometer – Review 2022 and Preview 2023” made annually by EY, which highlights how Italian m&a closed an unexpectedly positive year both in terms of number of transactions and countervalues (see the press release here). Looking only at the first half of the year, in fact, EY had reported how, due to the start of the Russian war in Ukraine, the aggregate acquisition value had fallen by 40%, to 30.7 billion euros, compared to 51.3 billion in the first half of 2021 (see press release here).
Numbers, the annual ones, which differ from the last report KPM extension, “M&A market in Italy in 2022”in which the advisory company highlights how last year mergers and acquisitions decreased to 80 billion euros in terms of transaction value compared to 100 billion in 2021. All spread over a total 1,184 dealsin 2.5% drop from 1,214 operations in 2021. The data must be entered in a context of strong macroeconomic and geopolitical uncertainties, compared to a year (2021) in which they had been pushed upwards by the conclusion of the Stellantis operation (about 20 billion euros) (read other article by BeBeez).
Both reports agree on the contribution of private equity, with 131 deals for 19 billion from 200 deals for 12 billion in 2021, for KPMG, while for EY the pe funds have completed 347 buy-out deals on Italian targets, for a value of 62.4 billion euro (compared to 224 transactions in 2021, for €42.6 billion), reaching an all-time record in terms of both value and volume. Taking into account both investment and divestment activity, and considering transactions announced by funds and those conducted by private investor club deals and investment holding companies, the consolidated BeBeez updated at the end of December indicate well 549 total operationsof which 204 from direct investments and 203 from Italian add-ons, i.e. 9% more than the 497 at the end of 2021.
As for the value of operationshave been 20 those on companies with an enterprise value of at least 500 million euros, that had Italian companies as protagonists, in which at least 15% of the capital of the target companies has changed hands. Of these, 12 concerned companies with an EV of at least one billion. But there is also a fair number of deal (8) Of medium-large size on companies with EVs of at least 300 million and just under 400 million. Also in 2021 several mega-deals were closed and many in any case important by the standards of the Italian market. Particularly, BeBeez he had counted as many as 40 of private equity on companies with EVs of at least 500 million, which had Italian companies as protagonists with the change of hands of at least 15% of the target companies. Of these, 24 deals were related to companies with an EV of at least one billion (see here the BeBeez Private Equity 2022 Report, available for subscribers to BeBeez News Premium and BeBeez Private Data).
In general, looking at the Investment Banking Scorecard of wsj extension and of Dealogic, it should be noted that globally M&As decreased by 35%, to around 3,700 billion dollars, of which 900 only in Europe (-27%) and 1,530 billion in the United States (-41%). Among the most important operations in 2022, the wsj extension remember in the first place the takeover of Microsoft on Activision Blizzardfor 75 billion dollarswhile in Europe, the first position goes to the acquisition of Mileawaya Dutch real estate company, by the American fund Blackstone for an ex-debt value of 28 billion dollars. In fourth place we find the US giant itself and the takeover bid Atlantia closed together with Edition of the Benettons for a total value, excluding debt, of 13.8 billion (see here a previous article by BeBeez).
Going back to the numbers for Italy, Marco Daviddi, strategy & transactions markets leader Europe West, EY, says that “this is somewhat unexpected. The geopolitical scenario, inflation, energy costs, tensions in supply chains and the increase in the cost of money have had an impact on the market, but if initially it was considered that they could cause a brake in a context of uncertainty, in reality, also due to growth of GDP among the most solid in Europe, the Italian market showed great lucidity and effectiveness. The Italian system, after the crisis linked to the pandemic, seems to have effectively understood how the m&a lever can be an effective tool for accelerating corporate transformation processes and for acquiring competitiveness. In fact, against a high incidence of mega deals, which totaled investments of approximately 56 billion euro,The mid market was also characterized by particularly lively activitywith a total invested amounting to approximately 33 billion, up 24% compared to 2021”.CopyAMP code.
At a sectoral level, the industrials & chemicals (with 24%), technology (16%) and consumer (16%) sectors represent the reference sectors of the market by incidence of the number of transactions. The technology (+3%), infrastructure (+2%) and business services (+1%) sectors show a positive trend compared to 2021 – again as a percentage of the total number of transactions; on the other hand, the industrials & chemicals (-3%) and consumer (-3%) and consumer (-3%) sectors, most penalized by the push from inflation, recorded a slight decrease compared to the previous year – albeit growing in absolute terms. Even energy saw an overall slight contraction (-2%) compared to last year, with contrasting dynamics between sub-sectors: significant growth in alternative energies, the more traditional oil&gas in difficulty.
For 2023, EY talks about a multifaceted scenario: if on the one hand international trends suggest a prudent attitude towards estimates of M&A activity in Italy, on the other hand the Italian system has so far demonstrated a good ability to react and reply. The pipeline of operations on the market or about to be placed on it is solid and buoyant, generally in all sectors. The report confirms a certain polarization in the interest of the funds – expected for 2023 to confirm their leading role on the market – especially in the tech, healthcare, pharma, consumer sectors (but provided they have recognizable brands with high potential) and infrastructure (with assets capable of guaranteeing stable cash flows). Furthermore, there is a growing interest in niche sectors linked to professional development (education, personnel search and selection, talent management). Lastly, EY underlines the continued interest also of domestic and international industrial buyers in the traditional Made in Italy sectors. In the wake of what is happening internationally, joint ventures, alliances and mergers will continue to acquire greater importance as, the study explains, more and more companies believe that being part of an ecosystem and collaborating with other companies, even adjacent to their sector , is a key success factor.
“Some unknowns weigh heavily: the persistence of the military crisis in Eastern Europe, the new wave of Covid-19 in China, the restrictive economic policies by the Central Banks and the generalized increase in the cost of money, together with a more complex access to debt. On the other hand, the liquidity present in the system continues to be high and the shocks of recent years have accelerated a series of transformations that have forced companies and entrepreneurs to face the need to open up capital to the participation of subjects able to bring fresh resources and know-how, a phenomenon destined to persist in various sectors. Therefore, in the first months of 2023 a more complex negotiation composition between the expectations of the sellers and the willingness of the buyers is to be expected, with an inevitable brake on the completion of the deals, but the need to continue to operate a rapid transformation of the operating and business models, under the banner of reviewing supply chains, target markets, operational efficiency and defining new ways of interacting with customers, it will continue to foster solid m&a dynamics. In this context, public finance choices, the ability to support employment and the maintenance of competitive costs appear to be relevant. And we cannot fail to mention the Pnpp which will have to come to life, with the effects of the structural reforms being finalized and the start of the announced investments”, concludes Daviddi.