Retail deals take a dive in Q1

Consumer and retail deals fell in the first quarter, but this was more pronounced with private equity deals, according to a KPMG report.

Why it matters: Sector deals activity was strong in 2021, but several macroeconomic events, including rising interest rates, supply chain disruptions and geopolitical uncertainty stemming from the war in Ukraine, hampered M&A in the first quarter, KPMG noted.

What’s happening: The number of private equity deals declined 51% to 102 in the first quarter from the previous quarter.

• “They’re always looking to the future,” says Kevin Martin, KPMG’s deal leader for its U.S. consumer and retail division, regarding the slowdown.
• They’re asking themselves, “where is the market going and what types of returns can they achieve relative to a transaction they want to enter into,” he says.
• But private equity still has lots of dry powder, he adds. “It’s just mere timing.”

Of note: There was only one SPAC deal in the C&R sector in the first quarter, a 90% drop from the prior quarter, KPMG’s report found, as the threat of the SEC tightening its grip on the space quelled investors’ appetite.