Record breaker: US M&A 2021
Record breaker: US M&A 2021

Record year for private equity dealmaking

Transaction values more than doubled year-on-year, as firms deployed ever-larger amounts of dry powder

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In line with the broader M&A market, private equity firms had an exceptionally busy 2021. Deal value soared to US$987.6 billion in the year, more than doubling what was an already high total of US$474.5 billion in 2020. This is now the highest value recorded for any year on Mergermarket record (since 2006). Volumes were also up significantly, rising 59 percent to 3,460 deals—again, a new annual record.

Buyouts drove much of this increase, as aggregate deal value jumped 157 percent on 2020 totals to US$665.5 billion, with volumes rising 64 percent to 2,385 deals. This high level of activity reflects the significant stores of dry powder at private equity firms' disposal. Globally, this stood at US$2.3 trillion in August 2021, according to Preqin, with US firms holding approximately 50 percent of the total. In addition, thanks to the trend for co-investment by private equity fund investors—the limited partners—the industry's firepower is significantly larger than these figures suggest.


The value of US PE-related deals in 2021— more than double the same period in 2020


Technology and club deals push volumes higher

Technology and healthcare continued to be among the more popular sectors for US-based private equity deals, accounting for more than half of the industry's total deal value. Indeed, the largest US private equity deal of the year was in healthcare. Medline Industries, a medical supplies manufacturer, was acquired for US$34 billion by a consortium that included The Carlyle Group, Hellman & Friedman, Blackstone Group, Abu Dhabi Investment Authority and GIC.

This transaction also demonstrates the recurring popularity of club deals. The profileration of club deals clearly reflects a step-up in the deal size some firms are targeting—an unsurprising trend given the fact that investor commitments are concentrating among larger firms—the top-25 firms between them are sitting on half a trillion dollars of dry powder.

Given higher valuations, it's unsurprising that exit activity also rose in 2021, up 49 percent by value to US$482.2 billion and up 50 percent by volume, totaling 1,511 deals. Private equity houses are also clearly taking advantage of a seller's market to crystallize returns for their investors.

Among popular exit types is merging portfolio companies with a SPAC. Blackstone did just that to exit benefits provider Alight in a deal that valued the company at US$7.3 billion. With so many SPACs raised looking for targets, this trend may be only just beginning.


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Record breaker: US M&A 2021


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