PE deal activity remains robust, but value dips

Transaction pace still brisk in 2022

The pace of private equity (PE) transactions remained brisk in 2022 after a record-breaking haul in 2021, but deal value shrank last year to more moderate levels, according to PitchBook data.

Both the pace and the values of transactions rose to historically anomalous levels in 2021 as demand that was bottled up the previous year amid COVID-19 shutdowns led to a surge in activity and prices.

That activity continued in 2022, as PitchBook estimates that 8,897 deals were completed, a number that was just shy of the 9,120 from the year before but almost 3,000 higher than the deal volume reported in either 2020 or 2019.

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Deal values, on the other hand, declined in 2022 after the median transaction price registered at just over $70 million in 2021. As interest rates jumped and Russia’s invasion of Ukraine created uncertainty in global markets, buyers became more conservative in the prices they paid, and the median deal value dropped below the 2019 level.

Despite the decrease in values overall, the percentage of overall value allocated to buyouts, add-ons and PE growth/expansion transactions remained virtually identical to 2021. After add-ons surpassed buyouts/leveraged buyouts in the first pandemic year of 2020, buyouts have rallied back to their customary position of accounting for about half of all PE deal value in 2021 and 2022.