Lawyer Monthly - January 2022 Edition

For IPOs, it has been a year of tremendous success. Proceeds of IPOs have seen a 96% increase from the year beginning 1 December 2020, reaching a total of $383.8 billion worldwide – with $111.7 billion (29%) stemming from the US alone. 1 Much of this can be credited to pent-up demand during the first year of the COVID-19 pandemic, though the underlying strength of the market cannot be discounted. Looking ahead to 2022, however, we can expect to see some investor reticence regarding high-value IPOs. Of the $1 billion-plus IPOs undertaken in New York, London, Hong Kong and India in 2021, 64% of companies are now trading below their list price. Perhaps the most notable of these companies is Deliveroo, which generated significant excitement ahead of its IPO and currently trades more than 40% below its debut price. Potential trends as reported by PWC 2 • 2021 saw more “megadeals” – transactions worth at least $5 billion – reported in the US than ever before. However, deals worth between $500 million and $5 billion have also surged, rising from a typical 400-500 to 900 in the past year. • Tech acquisitions by non-tech companies have accelerated as well, with total deal value in the US rising from $140.8 billion in 2020 to $316.8 billion in 2021 – by far the greatest proportionate jump in the past four years. • The bar for achieving positive results through M&A appears to have risen. In the past 36 months, shareholder returns of more than half of acquiring companies underperformed their industry benchmark in the two years following completion of their last major deal. In addition to the above, a notable increase has been observed in M&A disputes. For a look at what this might portend for deals in 2022, I would urge you to take a look at the article by Freshfields partners Ali Kirby-Harris, James Kennedy and Samantha Trevan on page 32. 1 https://www.investorschronicle.co.uk/news/2021/12/16/exceptional-year-for-ipos-unlikely-to-be-repeated/ 2 https://www.pwc.com/us/en/services/deals/industry-insights.html What’sHappening in theWorldof M&As and IPOs? 84 WWW.LAWYER-MONTHLY.COM JAN 2022