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Retail deals take a dive in Q1

Number of <span style="background:#054f9f; padding:3px 5px;color:white;">strategic</span> and <span style="background:#15a0ff; padding:3px 5px;color:white;">PE</span> consumer and retail deals
Data: KPMG; Chart: Simran Parwani/Axios

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.

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