The investment scene continues to tick along into the second quarter, yet at a slower clip than indicated at the beginning of the year. We speculated last month that the record-high IPO levels seen in 2021 were seeing a drop-off in Q1 2022. Analysis from EY1 appears to bear this out, as after a strong showing in January the market slowed down dramatically for a quarterly IPO proceeds decrease of 37% and a yearon-year decrease of 51%. A combination of factors including geopolitical tension, stock market volatility and continuing pandemic risk likely played a role in the decline. On the M&A side, Kaufman Hall has reported a similar slowdown in healthcare transactions.2 The report remarks that Q1 is notable for its lack of “mega” transactions, in which the seller or smaller party receives revenues in excess of $1 billion – a trend that has characterised previous quarters and offset the relatively low number of transactions seen since the outbreak of the COVID-19 pandemic. As reported elsewhere, acquisitions in the financial services sector were also hit in the first quarter, falling 28% in volume and 22% in value.3 Of course, the month ended with a bang as Tesla CEO Elon Musk clinched a deal to buy Twitter for $44 billion4, marking the largest acquisition financing ever put forward by a single person. Apart from stirring speculation as to how the takeover would impact moderation on one of the world’s largest social media platforms, news of the deal also prompted a 12% ($126 billion) drop in Tesla’s value5 on fears that Musk may sell his stake in the company to fund the $21 billion equity portion of the buyout. Twitter’s own shares slid 3.9%. Other moves seen this month include the joint Benetton and Blackstone offer of $63 billion for Atlantia in a take-private deal6, a bid by a consortium led by KKR & Co to buy Ramsay Health Care Ltd for $20.1 billion7, and Blackstone’s $12.8 billion purchase of American Campus Communities Inc. along with all of its debts8. We look forward to seeing the deals to come in Q2 and beyond. What’sHappening in theWorldof M&As and IPOs? 74 WWW.LAWYER-MONTHLY.COM MAY 2022 1https://www.ey.com/en_gl/news/2022/03/global-ipo-market-experiences-significant-slowdown-in-q1-2022 2https://www.kaufmanhall.com/insights/research-report/ma-quarterly-activity-report-q1-2022 3https://www.bankingdive.com/news/value-volume-of-banking-ma-sees-a-q1-chill/622712/ 4https://www.reuters.com/technology/exclusive-twitter-set-accept-musks-best-final-offer-sources-2022-04-25/ 5https://www.reuters.com/article/twitter-ma-musk-tesla/tesla-loses-126-bln-in-value-amid-musk-twitter-deal-funding-concern-idUSL2N2WO30K 6https://www.reuters.com/business/benettons-blackstone-offer-23-euros-share-atlantia-bid-2022-04-14/ 7https://www.bloomberg.com/news/articles/2022-04-19/kkr-led-group-bids-15-billion-for-australia-s-ramsay-health 8https://www.reuters.com/business/blackstone-buy-acc-128-bln-2022-04-19/
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