A Record Breaking Year For Deals

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Looking back at 2021, many experts, including myself, predicted a robust year for M&A deals, which was top-notch. Psychologically, coming out of the pandemic, everyone is interested in getting back to business and looking for opportunities to gain the capital they need.

The episode explores the deals that made 2021 a record-breaking year - for good and bad. I must say 2021 was an unbelievably busy year in the M&A sector - it was busy for other types of deals too, but it was more prevalent in the M&A sector. There were record numbers in the finance and tech sector in the past year.

Looking back at 2021, many experts, including myself, predicted a robust year for M&A deals, which was top-notch! It seems that 2022 is going to be another really good year. Psychologically, coming out of the pandemic, everyone is interested in getting back to business and looking for opportunities to gain the capital they need. Let’s look at what happened in 2021 with sectors and trends!

The Restaurant Retail

The restaurant industry is, as always, a lot more lit than we think. The fact that so many deals closed with such high-powered clientele should tell you everything about the strength of this sector! We all know the pandemic had a significant effect on everyone, including companies. The retail restaurant industry wasn’t left out. You might think that fewer deals might've been closed or the deals generated might've represented less money with the turbulence of 2021 in the restaurant industry, but you'd be wrong. The industry's challenges did not stop deals from closing or money from being made.

Tough times sometimes come with a ray of hope, and that was the case here - the pandemic turned this sector into a bigger-player regime - more like “survival of the fittest.” It’s common reasoning - the bigger players are the ones that have the capital access; they are the ones with the capacity to survive. There’s a little glitch here that’s not apparent to all; not every big player survives in the long run! Events vividly back this point during the pandemic. For example, NPC International went into bankruptcy, which triggered the sale of Wendy’s and Pizza Hut.

Consumer And Retail 

This is another area that was challenged for a while. It’s another aspect with a lot of private equity, and when capital is involved, we all know we have to look at where it’s going. These assets and investments have been going into areas that have grown since the pandemic, e.g., pet food and products. People like to jump on trends!

Something interesting happened in 2021 with one of my previously recorded podcast episodes. It was a mixed result for SPACS! They are Special Purpose Acquisition Companies - formed for the sole purpose of acquiring. They are companies that were taken public as acquisition companies to raise money for the market. According to the results I saw in the consumer and retail areas, the vehicle for acquisitions became a little shaky in the consumer and retail areas. It’s a mixed result that shows different reasons why deals happen, and they happen on the upsides and downsides.

Another sector that was affected by the pandemic was convenience stores. They suffered a great deal, but they got back on their feet. They are still open, and they’ve started to do better. A lot of deals happened in this sector. 

Fastest Growing Industries for Deal-Makers

Financial services and FinTech are hot industries right now, but they won't be the only ones to watch. Wealth management is also seeing an increase in private equity funding, especially from PE firms that have recently invested heavily in other financial service companies like banks or wealth planners. This is an industry booming with opportunities. It will be interesting to see where all that PE money goes!

Luckily for pet owners, there is a booming market in the US and abroad for food and toys. The increase of people with pets has led many companies to specialize in these goods. With the rise in popularity of pets, particularly dogs and cats, during the global pandemic has led to increased demand for pet supplies. This means more people are looking to purchase products made by companies specifically catering to their needs- which is excellent news because it provides an opportunity.

Overall, a lot of capital is still out there. I have to tell you I haven’t seen any of the bumps we experienced in the past year slow down business. There still seems to be money out there.

Let’s Take a Look at What Happened in the M&A Space

Business owners adapt easily within the M&A space. When things change, maybe due to a pandemic, a slight chain issue, or anything at all, they see it as an opportunity to get past the challenges - they get into other deals.

Strategic Alliances

This is when two companies agree to undertake a mutually beneficial project while each retains its independence. We saw a lot of this happen during the pandemic. It happened with a client of mine who had a transportation issue, which would have been problematic for the client. Luckily, there’s someone else - another company that has trucks available. My client jumped on the opportunity to make a joint venture - a strategic alliance. This kind of deal could be structured in any way, from leasing the vehicles to buying them. This particular scenario isn’t just about the vehicle; it’s also the expertise.

Brands with values may have run into operational troubles, which could have happened to anyone. Sometimes, these brands can sell the value out. And when you do sell, I want you to understand;

Just because you sell doesn’t mean you have to exit. You could stay on and have a different relationship with the company as an employee or an executive. It’s a big difference if you’re an entrepreneur who built the company. You have to out-way the pros and cons before making any decisions.

I still think there’s a huge opportunity for deals out there; you just have to track them on the buyer’s side and seller’s market. In my practice, the deal works because we track it.

Listen to the full solo episode here.

Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

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Corey Kupfer is an expert strategist, deal-maker, and business consultant with more than 35 years of professional negotiating experience as a successful entrepreneur and attorney.

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