Alexander Hutton is pleased to present the latest edition of our Northwest Market Update! Q1 2022 reflected consistency with past years as we anticipate transaction counts in our region to steadily grow throughout the year. If you didn't catch the last edition, this quarterly report provides data and insights on: transaction counts and trends by industry as well as by state in the NW region, M&A advisory pieces from our Managing Directors, how the Northwest compares to the rest of the U.S., and more. 

Market Overview

2021 was a very active year for M&A and as expected the 4th quarter was quite busy.  While deal count and valuations dropped in Q1 2022, when compared to Q1 2021 the differences were less acute (and average valuations remain higher). Consistent with past years, the transaction count in our region grows steadily throughout the year and we anticipate seeing this trend continue in 2022. We have seen the appetite by strategic and financial acquirers for high quality companies with durable revenues and excellent profitability continue to strengthen. These companies are commanding significantly higher than average valuations as the appetite by acquirors for high quality companies continues to grow. 

The larger question is what does the future hold for deal activity in an inflationary/global conflict/pandemic environment? Our view is that deal activity will remain elevated, even if valuations drop. With $2-3T of private equity and $10T of private debt to be deployed, activity will remain robust.

In the US today, there are over 7 million private companies with owners over 55 years of age, while there were only 14,000 middle-market M&A deals last year. So many years of M&A backlog remains as generational wealth is recycled (as baby boomers increasingly look to retire.)

With 36 years in M&A, Alexander Hutton, Seattle’s oldest investment banking firm. We have seen the M&A market through multiple cycles. See page 4 of the attached full report for Managing Director Scott Hardman’s reflections on exogenous events and their impact on deal activity. 

Anyone having an interest in the buying or selling of companies in our region should find this both interesting and helpful, particularly as the market responds to the latest changes in our economy. We are grateful to be able to provide these insights on what is happening in the M&A market both locally as well as nationwide.

We hope you find this quarterly report useful. Please be in touch with any questions or if we can otherwise be of service. We look forward to hearing from you!

To View/Download the Full Market Report click the link below.