Leverage the right market Insights to create transaction opportunity
A convergence of unknowns continues to impact deal activity, with no clear end yet in sight. Geopolitical tensions, recession fears and monetary-policy concerns have pushed traditional IPO activity to its lowest levels in nearly 20 years. The SPAC M&A market, already subdued in the face of a stream of SEC rulings, declined slightly from the previous quarter in activity levels, but still shows a rise in withdrawals, cancellations and redemption rates. As the Federal Reserve raises interest rates to battle inflation, seasoned market professionals are watching closely for signs of a US economic contraction.
Source: KPMG, see below
You have to align financial reporting with your equity story. That’s how you cut through market noise. The insights are in the accounting, if you know where to look.
Isaac Freites
Director, Accounting Advisory Services
While every company’s mix of deal-valuation drivers is unique, some market indicators are broadly relevant. Below, a selection of market indicators, updated quarterly.
After reaching an all-time high in 2021, traditional IP0 volume witnessed a steep fall in YTD 2022. Q3’22 saw just 34 IPOs recorded, a 67.6% decrease from 3Q’21.
IPO activity remained largely flat from Q2’22 to Q3’22, in both numbers and gross proceeds, because of uncertainty induced by geopolitical tensions, the specter of US recession, and continued interest rate hikes.
US SPAC M&A Activity
SPAC M&A volume and value (US$ bn) (2017-Q3'22)
SPAC M&A volume by sector (2017-Q3’22)
In the competition for investors and capital, investment narratives matter. They cut through the deluge of data and analysis, and help companies sift real windows of opportunity from market noise. The most compelling deal stories come from insights about a company’s unique mix valuation drivers. Sector. Markets. Customers. Portfolio mix. Capital structure.
