Global PE deal volume surges by 40% in 2021

Global private equity and venture capital deal-making soared in 2021, and year-end transaction volume was up 40% year over year.

Private equity managers sought to spend record amounts of dry powder following a coronavirus-induced pause on activity and dent to market confidence during 2020.

In total, 24,722 deals worth an aggregate of $1.2 trillion were announced in 2021, according to S&P Global Market Intelligence data, dwarfing 2020's 17,618 deals worth $579.71 billion.

6,233 deals closed in the fourth quarter of 2021, 30.8% of which were closed in December 2021.

Among the deals announced in December 2021 were Lone Star Americas Acquisitions Inc.'s $3.8 billion take-private of machinery components maker SPX Flow Inc.; a funding round in Chongqing Ant Consumer Finance Co. Ltd., the consumer finance arm of Ant Group Co. Ltd., with a total transaction value of $3.45 billion; and American Securities' $3.33 billion acquisition of thermoset resins producer Hexion Holdings.

North America accounted for the most fourth-quarter 2021 deals, with 2,316 deals announced. Asia-Pacific transactions numbered 1,979, while Europe saw 1,503 deals agreed across the quarter.

Technology, media and telecommunications remained the most popular sector, attracting investments of $26.46 billion in December 2021, although this was down from $39.7 billion a year earlier.

Values were bolstered by Advent International Corp.'s acquisition of a majority stake in U.S.-headquartered digital engineering services company Encora Digital Inc., which had a total transaction value of $1.5 billion; a $1.26 billion funding round into China-based semiconductor manufacturer GTA Semiconductor Co. Ltd.; and KKR & Co. Inc.'s acquisition of a 49% stake in Spanish dark fibre infrastructure operator Red Eléctrica Infraestructuras de Telecomunicación SA, which had a total transaction value of $1.09 billion, according to Market Intelligence data.

Investments in the financials sector surged year-over-year, rising by 167% to an aggregate of $13.57 billion in December 2021. Values for healthcare and industrials assets were subdued year over year, decreasing by 20% to $10.83 billion and 17% to $10.41 billion, respectively.