The overall private equity deal activity picture is fairly bright through the first three quarters of 2022. As of the end of September 2022, the estimated deal count reached 6,530, down from the full-year results of 2021 at 9,085. If the fourth quarter continues the trend we’ve seen through the first three, overall deal activity will reach its second highest ever.
On deal value, overall deal value for 2022 stands at $819.2 billion, far better than any of the prior years except calendar year 2021. Last year’s figures ended at $1.235 trillion, far better than any prior year before. Since 2022 has already surpassed all previous years, but is unlikely to beat what 2021 produced, this year will likely go on record as the second-best year for private equity deal activity ever.
Source: Pitchbook
An Industry View for Software
Shifting to an industry view, the following is a look at private equity deal activity for the software industry. As with overall deal activity, this year is setting up to be the second best on record. Through the first three quarters of this year, software deals reached 587, well below the number seen in 2021 at 1,103 but much higher than any previous year. When looking at overall deal value for private equity activity in the software world, the 2022 deal value at $129.3 billion has already surpassed any prior year with the except of 2021’s $175.4 billion. Life is still good if you’re working the private equity software world.
Source: Pitchbook
The Add-Ons View
Shifting to the add-ons view, the following has the picture of add-on private equity deal count from 2012 through the third quarter of 2022. Overall, add-ons and non-add-ons for 2022 are still heading forward. Unless the fourth quarter activity collapses, the 2022 add-on private equity deal count is likely to be the second best ever, behind only the almost unbelievable activity seen in 2021. When looking at the add-on percentage of the buyout, the 2022 value is the highest on record at around 80%.
Source: Pitchbook
Summing Up
Overall, although 2022 has not been a blockbuster year compared to housing activity in 2021, overall activity has been decent, with the year potentially ending as the second highest of all time. Investors apparently still see the value in the future return of private equity investments, regardless of whether the global economy weakens further in the coming year.
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