Clare Advisors Releases Guide on Trends M&A Advisors See In The Market
One of the biggest changes in the recent marketplace was the significant amount of activity in 2021. About $5.9 trillion worth of mergers and acquisitions were finalized, beating previous years that didn’t even reach $4 trillion.
The pandemic has played a significant role in agency owners' decisions to sell their agencies. Many M&A advisory firms had to hold off or completely stop transactions in 2020.
As a result of the standstill of 2020, last year saw a significantly built-up demand for deals. The high volume of M&A activity in the past year will indicate continuing trends in 2022.
Special purpose acquisition companies (SPACs) will use this year to acquire agencies using the funds they raised in 2021. It’s expected that many SPACs will use their raised money to buy within the next 18 months or less.
Agencies looking to buy or sell also need to be aware of the possible increase in rates and changes in capital gains tax. Although interest rates are relatively low now, they are expected to rise later this year.
The potential tax changes are also an incentive for agencies to seek advice from M&A advisors to discuss the benefits of selling this year versus the next. Advisors should be aware of any potential tax implications on a purchase or sale.
Clare Advisors is a buy-side and sell-side advisory specializing in M&A and financial services for digital advertising agencies, marketing agencies, and business service providers. Business owners considering a sale, merger, or acquisition can connect with an M&A advisor by visiting the Clare Advisors website.
John Burns
Clare Advisors
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