There is a lot to consider in the current M&A and corporate finance environment. Despite the volatility and uncertainty of the market, broader strategic topics remain top-of-mind for business leaders and boardrooms. William Blair’s Corporate Advisory team highlights five key themes for public company boards and executive management teams to watch in 2022.
Key takeaways:
- Unsolicited Offers and Take-Private Activity: In 2021, 85% of take-private deals began with an unsolicited offer—the highest portion of total announced public U.S. deals in the last decade. Several factors will drive an uptick in unsolicited offers in 2022.
- Portfolio Optimization: Large companies are shifting attention to portfolio optimization due to several factors, including a relatively strong transaction multiple environment, wider spreads in multiples between sub-sectors or business strategies, and eagerness among shareholders for near-term results.
- Digitalization: Digital capabilities are no longer seen as a competitive advantage—they are must-have competencies regardless of a company’s sector. We expect non-tech companies to prioritize digital transformation in 2022.
- ESG’s Role in Corporate Governance and M&A: Increased pressure from investors for greater ESG accountability are leading public company boards and executive management teams to implement strong ESG policies and incorporate ESG as a key part of M&A due diligence.
- Shareholder Activism: Shareholder activism decreased in 2020–2021 as investors generally gave companies time to respond to the pandemic’s challenges. Now that the dust from the pandemic has begun to settle, we expect activism to intensify in 2022.