PitchBook-美國PE中型市場(chǎng)報(bào)告（英）-2022

2022ANNUALUSPE

Midd

le

Ma

rketRepor

tSponsored

bySponsored

byContentsExecutivesummary4PitchBookData,Inc.John

Gabbert

Founder,CEODeals5NizarTarhuni

Vice

President,

Institutional

Research

and

EditorialDylan

Cox,CFA

Head

ofPrivateMarkets

ResearchDeals

bysizeand

sectorAwordfromAntares121315InstitutionalResearchGroupSpotlight:The

roleofplacementagents

inGP

fundraisingAnalysisExits18Tim

ClarkeLead

Analyst,

Private

Equitytim.clarke@AwordfromAICFundraisingand

performance222428Jinny

ChoiAnalyst,

Private

Equityjinny.choi@Q4

2022USPEmiddle-marketlendingleague

tablesKyleWaltersAssociate

Analyst,

Private

Equitykyle.walters@Methodology

change

disclosure:

We

havechangedourmethodologyforrecordingdealactivity.Thiswillapplyto

thisandallfuturePE-

andM&A-relatedreports.Allannounceddealswillbeincludedinour

reportingoftotaldealactivityinadditionto

completeddeals,

and

announceddateswillbe

usedto

reflectdealtiminginfavorofclosingdates.

We

havemadethischangeto

reducethelagtimebetween

whendealsarenegotiatedandpricedand

whentheycloseto

provideamoreaccuratedepictionofvaluationtrendsandvolumeactivity.Pleasenotethatthismethodologychangeappliesonlyto

PEdealsand

M&A

dealsandnotto

venture-relateddeals,whichwillcontinueto

useclosingdatesforrecordingpurposes.DataAlyssa

WilliamsData

Analystpbinstitutionalresearch@PublishingReportdesignedbyJoeySchafferandMeganWoodardPublished

on

March

14,

2023Clickhere

for

PitchBook’s

report

methodologies.32022

ANNUAL

US

PE

MIDDLE

MARKET

REPORTSponsored

byExecutive

summar

yIs

thePEmiddlemarketfinallyhavingits

moment?Middle-marketfunds,

whichwedefine

as

between

$100

millionand$5

billioninsize,haveopened

apositiveperformance

gapversusmega-fundsinback-to-backquarters.

Thishasnotoccurredsince2020and

isinstark

contrasttoQ4

2021whenmega-fundsweretrouncingallotherfunds

byawidemargin.Equallyencouragingisthemiddlemarket’sshareofallPEbuyoutsinQ4

2022,whichrebounded

toits

best

quarterlylevelinfiveyears.Middle-marketexitactivity

alsosloweddownin2022and

evenslippedbelowpre-COVIDexitflow.The

strongmonetizationenvironmentPEhadenjoyedturnedwiththemacroeconomicheadwindsas

potentialsellers

held

out

forbetter

prices.

Althoughpubliclistingsarenotamajorfactorforthemiddlemarketinanygivenyear,withtheIPO

marketeffectivelyclosed,

PEexitsweresupported

byonlytwopotentialexitroutes:sponsor-to-sponsorexitsand

exitstocorporates.These

twotransaction

types

sustainedexitflow,withtheformer

accountingforslightlymoreofthemiddle-marketexitactivity

thanthelatter.In2022,theUSPEmiddlemarketcame

downfromwhathadpreviouslybeen

themost

activedealmakingperiod

initshistory.Deal

activity

succumbed

tobouts

ofhighinflation,aggressiveinterestratehikes,and

valuationvolatility—allofwhichafflicted

themarketssincethevery

beginningoftheyear—andsettled

25.6%belowthehigh-watermarksetin2021.Nevertheless,

dealmakingremainedwellabovethepaceseen

beforethepandemicas

thenumber

ofinvestmentsandbuyouttargetsinthemiddle-marketspaceremainplentiful.Diminishedaccesstolow-costdebtcapitalforleveragedbuyouts(LBOs)and

abuyer-sellervaluationdisconnect

areleadingPEfirms

tolook

inthemiddlemarketfordealsthataremoreeasilyfinanced

and

completed.Add-ondeals

reachedtheirhighest-evershareofbothmiddle-marketdeal

activityand

overallUSPEdeal

activity

as

theybecame

anevenmoreattractiveoptionforsponsors

when

comparedwithlargeplatformacquisitions.Public-to-privatedeals,

whichhaveusuallybeen

confinedtothelargestend

ofthedeal

spectrum,arealsoshiftingdownintothemiddlemarketas

publicvaluationsdropsignificantly.Fundraisingremainedsteadyinthemiddlemarket,withtheoverallnumber

offunds

fallingjustshyof2021’sannualfigure.

The

trendofrisingfund

sizesacrossthePElandscapewasalsoreflectedinthemiddlemarket:The

medianmiddle-marketfund

sizeincreasedalmost40%

since2021,and

thetop30

funds

raisedduringtheyearbroughtinoverhalfofallcapitalraisedinthemiddlemarket.GPs’rapidreturntomarketwithlargerfundraiseshitawallagainstinvestors’supplyofcapital,withmost

LPs

alreadyhavingallocatedtheirannualPEbudgetsbyH1

2022or

earlyH22022.Goingforward,bothdeploymentand

fundraisingcyclesareexpected

toslowfromtheirrecentrapidpaceand

insteadreverttotheirhistoric—andmoresustainable—norms.42022

ANNUAL

US

PE

MIDDLE

MARKET

REPORTEXECUTIVE

SUMMARYSponsored

byDealsPEmiddle-marketdealactivity4,2193,3142,8302,8362,4592,1501,7711,8451,7921,5531,338$215.22012$196.52013$289.32014$268.82015$269.72016$327.12017$403.22018$409.12019$358.32020$596.12021$443.82022*Deal

value($B)Estimateddealvalue($B)Deal

countEstimateddeal

countSource:

PitchBook

|

Geography:

US*AsofDecember

31,

2022OverviewPEmiddle-marketdealactivityby

quarter$2501,6001,4001,2001,000800600400200US

middle-market

PE

saw

a

year

ofsubdued

deal

activity

in2022

after

experiencing

a

record-breaking

pace

ofdealmakingjust

the

year

before.

In

2021,

PE

firms

closed

or

announced4,219

middle-market

deals

for

a

combined

$596.1

billion—around

50%

above

the

previous

annual

records

for

deal

countand

value

set

in

2019.In

2022,

PE

firms

closed

or

announced3,314

middle-market

deals

for

$443.8

billion.

Deal

valuewas

down

25.6%

and

deal

count

fell

21.5%

YoY

as

numerousmacroeconomic

headwinds—the

highest

level

ofinflation

in

40years,

aggressive

interest

rate

hikes,

and

geopolitical

conflict,toname

a

few—persisted

since

the

beginning

ofthe

year.Q12022

experienced

a

sharp

drop

in

dealmaking,

with

a

declineofover

40%

in

deal

activity

from

the

peak

seen

in

Q4

2021.Quarterly

activity

remained

flat

throughout

2022,

rangingfrom

800

to900

deals

for

around

$110

billion

in

total

perquarter.

When

compared

with

the

middle

market’s

historicaldealmaking

pace,

deal

activity

was

healthy

in

2022

and

showedstabilization

from

the

frenzied

activity

levels

seen

in

2021.

Deal$200$150$100$50$00Q2

Q4

Q2

Q4

Q2

Q4

Q2

Q4

Q2

Q4

Q2

Q4201720182019202020212022*Deal

value($B)Deal

countEstimateddealvalue($B)Estimateddeal

countSource:

PitchBook

|

Geography:

US*AsofDecember

31,

2022activity

remained

solidly

above

pre-COVID

levels,

with

deal1value

and

deal

count

higher

by16.9%

and

27.2%,

respectively.1:As

measured

bythe

average

annual

deal

activity

from

2017

to201952022

ANNUAL

US

PE

MIDDLE

MARKET

REPORTDEALSSponsored

byAlthough

the

macroeconomic

headwinds

at

work

in

the

largerPE

deal

space

haveimpacted

the

middle

market

and

muteddealmaking

in

2022,

signs

point

towardan

easing

environment.The

Golub

Capital

Altman

Index(GCAI),which

tracks

PE-backed

middle-market

companies,

reported

10.8%

and

9.2%YoY

revenue

and

earnings

growth

for

the

first

two

months

inPEmiddle-marketdealvalueasashareofallPEdealvalue70%65%60.4%Q4

2022,

respectively.

This

comparestoa

5.4%

increase

in2revenue

and

a

4.8%

decrease

in

earnings

for

the

S&P

500

YoY.The

results

suggest

stronger

economic

recovery

than

seen

inQ2and

Q3,

and

demonstrate

companies

are

abletoadapt

to360%55%50%45%40%58.1%changing

conditions

with

the

help

of

their

PE

sponsors.

The

fourmain

sectors

tracked

bythe

GCAI

show

both

positive

revenueand

earnings

growth

for

the

quarter,

with

industrials

and

techleading

the

group

with

low

double-digit

growth

for

both.

Theability

topass

increased

input

costs

onto

consumers

is

criticalfor

preventing

margin

compression

and

varies

byindustry.Strong

earnings

in

the

consumer

and

industrials

sectors

pointtostabilizing

supply

chains

and

adjustments

tohigher

energycosts.

Healthcare,

on

the

other

hand,

marked

a

1.3%

increasein

earnings

against

a

10.3%

increase

in

revenue,

demonstratingthe

pressure

posed

byrising

costs

oflabor

in

the

sector.2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022*Source:

PitchBook

|

Geography:

US*AsofDecember

31,

2022Since

the

peak

of69.3%

in

2012,

share

oftotal

PE

buyout

valuehas

drifted

down

over

the

past

10

yearstoa

low

of58.1%

byyear-end

2022.

The

middle

market’s

share

oftotal

PE

deal

valuePEmiddle-marketdealcountby

quarterasashareofallPEdeals85%80%75%70%65%60%55%50%45%40%76.5%63.5%Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q22021Q3Q4Q1Q2Q3Q420172018201920202022*Source:

PitchBook

|

Geography:

US*AsofDecember

31,

20222:

“U.S.

Middle

Market

Growth

Shows

aPositive

Surprise,”

Golub

Capital,

n.d.,

accessed

March

2,

2023.3:

“Earnings

Insight,”

FactSet,

John

Butters,

February

24,2023.62022

ANNUAL

US

PE

MIDDLE

MARKET

REPORTDEALSSponsored

bybroke

below

60%

for

the

first

time

since

2015

when

it

was58.3%.

The

loss

in

share

reflects

the

explosive

growth

in

mega-funds

(funds

of$5

billion

or

greater)in

the

past

several

years,which

havecrowded

out

middle-market

and

smaller

fundsboth

in

fundraising

and

deal

value.

With

the

massive

amountsofcapital

the

mega-funds

haveneeded

todeploy,mega-deals(dealsof$1

billion

or

greater)havetaken

up

a

whopping

34.4%ofall

PE

deal

value

in

2022.

The

middle

market’s

share

ofallUS

PE

value

took

a

nosedive

in

Q22022,

accounting

for

only44.9%

ofPE

deals

in

the

quarter

due

toa

peak

in

take-privates,which

were

some

ofthe

largest

buyouts

during

the

year,butit

rebounded

to

69.9%

byQ4

2022.

Deal

count

points

toaninteresting

shift.

Middle-market

deal

count

as

a

share

ofall

PEdeals

reached

the

highest

quarterly

level

seen

in

five

years

at76.5%

ofdeals

in

Q4

2022.

For

the

year,2022

annual

deal

countsettled

at

66.8%,

which

was

below

its

five-year

average.

Therecovery

in

the

middle

market’s

share

ofPE

deal

count

could

bea

sign

ofdeal

fatigue

setting

in

on

larger

deals.

As

it

becomesmore

challenging

tofinance

big

buyout

deals,

PE

firms

are

moreinclined

toturn

toadd-on

investments

or

growth

equity

dealsrather

than

large

LBOs.

Looking

at

just

the

middle

market,

themedian

buyout

deal

sizeslippedtoits

lowest

level

since

2016,falling

to

$147.0million

in

2022

from

its

previous

high

of$200.0million

in

2019.The

median

and

average

deal

sizemirror

thoseseen

during

the

pandemic-related

slowdown.MultiplesWhile

rising

interest

rates

had

the

greatest

impact

onpublic

company

valuations,

with

high-growth

companiesexperiencing

the

sharpest

falls,

private

markets

were

notimmune

toadjusting

valuations.

Valuations

were

driven

downacross

asset

classes

as

future

cash

flows

became

less

valuablewhen

discounted

at

higher

rates.

While

less

ofa

problemfor

the

middle

market,

increased

borrowing

and

leveragecosts

dampened

deal

activity

and

affected

multiples

forthe

transactions

that

did

go

through.

Median

EV-to-EBITDAdeal

multiples

for

the

middle

market

contracted

from

14.6xin

2021

to12.9xbythe

end

of2022.

Middle-market

EBITDA4multiples

peaked

in

2019

at

16.0x,

while

the

rest

ofthe

marketpeaked

later

in

2021—coinciding

with

the

record-breakingdeal

activity.

As

valuations

in

public

markets

havefallen

evenmore

precipitously,

sponsors

are

increasingly

likely

toturntotake-privates

and

carveouts

ofmiddle-market

companiesat

compelling

prices.

Atthe

same

time,

due

totight

lendingconditions,

middle-market

PE

buyers

are

needing

tocontributemore

equity

capitaltodeals,

making

them

even

more

pricesensitive

at

the

margin.MedianPEmiddle-marketEV/EBITDA

multipleMedianPEmiddle-marketEV/revenue

multiple16x14x12x10x8x3.5x3.0x2.5x2.0x1.5x6x1.0x0.5x0.0x4x2x0xDebt/EBITDAEquity/EBITDAEV/EBITDADebt/revenueEquity/revenueEV/revenueSource:

PitchBook

|

Geography:

US

and

EuropeSource:

PitchBook

|

Geography:

US

and

Europe*AsofDecember

31,

2022*AsofDecember

31,

20224:

Multiples

were

calculated

from

US-

and

Europe-based

middle-market

deals.

Given

the

similarity

between

the

two

regions

and

their

datasets,

and

due

todeclining

disclosure

rates

in

the

US,

wecombined

them

togain

greatersample

size.72022

ANNUAL

US

PE

MIDDLE

MARKET

REPORTDEALSSponsored

byAdd-onsacquiredcompaniesontotheirplatformswithmoreease.Add-onsalsoallowPEfirms

toacquiresmallercompaniesforlowermultiplesand

averagedowntheportfolio

company’scombinedmultiple.2022sawadd-ons

most

activeinfinancialservices

and

healthcare,makingupavastmajorityofrespectivedeal

counts.

Add-onsinthese

industriescan

oftenhelpwithtransformationand

innovationthroughtechnologyor

helpwithconsolidatingthemarket.Add-onactivity

ended

2022atits

highest-everlevelrepresenting72.3%

ofallUSPEmiddle-marketdeal

count,whilemakingup58.7%

oftotalmiddle-marketdeal

value,anotherrecordlevel.The

greatestsurgewasseen

intheuppermiddlemarket(dealsbetween

$500

millionand

$1

billion),whichisinpart

due

todeal

sizesshrinkingout

ofthemega-deal

category

as

financingdeals

became

progressivelymoredifficult

as

theyearwenton.

PEfirms

tendtoemployadd-onstrategiesas

asourceofinorganicgrowth,

whichallowsthemtoacceleratethegrowthofplatforminvestmentsor

createsynergies

thatcan

reducecosts

or

increaserevenue.Themiddlemarketinparticularoffers

numerous

opportunitiestoscale

giventhatitissmallerand

morefragmented,

andmiddle-marketcompaniesareoften

moreagilethanthoseatthelargerend

ofthemarket,whichtendstomakeforasmootherintegrationintoanexistingplatform.

Add-onopportunities

havealwaysbeen

ofinteresttoinvestorsinthemiddlemarket,but

demand

hasincreasedfurther.Aspublicmarketssuffer

atthehandsofmacroheadwindsandprivatemarketvaluationsadjusttoreflect

thistrend,add-ons

become

anevenmoreattractiveoptionforGPs

lookingtoscale

existingportfolio

companies.

Add-onstendtobesmallerbynature,and

as

suchtheretendstobe

less

ofavaluationdisconnect

between

buyersand

sellers

likethereisatthelargerend

ofthemarket.Thisallowssponsors

totackCarveouts2022

was

a

year

ofmargin

compression

for

big

corporations.Shrinking

profits

forced

big

public

companiestoreassess

coreversus

noncore

assets,

and

consider

divesting

those

assetstoother

buyers—oftentimes

cash-rich

sponsors.

In

2022,

251carveouts

took

place

in

the

middle

market

worth

an

aggregateof$50.0

billion,

a

slight

drop

from

activity

seen

before

thepandemic,

but

capital

invested

was

in

line

with

pre-pandemiclevels.

After

increasing

as

a

proportion

ofall

US

PE

carveoutsin

2021,

2022

saw

that

percentage

drop

back

down.

Carveoutactivity

remains

significant

despite

the

slight

dip

from

2021levels.

In

2022,

middle-market

carveouts

made

up

53.7%

ofall

US

PE

carveouts,

down

from

56.5%

in

2021.

These

divestedassets

can

sometimes

suffer

from

neglect

or

underinvestmentpriortotheir

disposal.

This

provides

PE

firms

an

opportunitytopump

in

new

money,turn

around

company

results,

anddrive

growth.

Buying

smaller

pieces

oflarge

companies

andAdd-ondealsasashareofallPEmiddle-marketdealsCarveoutanddivestituredealsasashareofallPEmiddle-marketdeals80%18%16%72.3%67.8%70%58.7%14%60%50%40%30%20%10%0%52.6%11.4%11.6%12%10%8.1%7.7%8%6%4%2%0%Deal

valueDeal

countDeal

valueDeal

countSource:

PitchBook

|

Geography:

USSource:

PitchBook

|

Geography:

US*AsofDecember

31,

2022*AsofDecember

31,

202282022

ANNUAL

US

PE

MIDDLE

MARKET

REPORTDEALSSponsored

byeither

restoring

them

back

tohealth

or

bolstering

their

growthprospects

is

a

classic

PE

strategy.

In

October,

TreeHouseFoods

completed

its

divestiture

ofnow-named

WinlandFoods

toInvestindustrial

for

$950

million.

The

spinout

allowsTreeHouse

tosimplify

its

businesstoimprove

execution

andaccelerate

growth,

while

allowing

for

Investindustrial

tostepin

and

continue

todrive

product

development

and

operationalTake-privatesareatried-and-truestrategyforPEfirms,especiallywhen

publicmarketsundergoasharpcorrectionand

privatemarketsholdout

forhigherprices.

Thisdescribesthecurrentenvironment.Sponsors

areabletoscoop

upattractivepubliccompaniesatsignificantdiscountstowhattheytraded

atjustayearagoin2021.Moreover,publictargetshaveamoreseasoned

and

fullytransparentrecordofoperatingresultsmakingthemmorebankable,

whichisespeciallyhelpfulintoday’stoughlendingenvironment.Normally,take-privatestendtobe

thelargestbuyoutsoftheyearwithdeal

sizeswellnorth

of$1

billion.Thatwasthecase

inthefirst

halfof2022,when

themediandeal

sizeofallannounced

take-privatesequaled

$1.7billion.Thatfigureshrankto$316.0

millioninthesecond

halfoftheyear.The

frequency

ofdealsalsoslowedfrom48

take-privateannouncements

inH1

to31

inH22022.The

lasttwomonthsof2022wereespeciallyslowwithjustthreeannounceddeals,

includingnone

fortheentiremonthofNovember.It’scleartousthatas

compellingas

take-privatesareinthecurrentenvironment,deal

flowisslowingdue

totheinabilityofsponsors

tosourceloans

forlargerdeals,

and

thetrendtowardsmallerdealsofless

than$1

billionissolidlyinplace.efficiency.

Similarly,in

November,

PE

firm

Cinven

acquired5TaxActfrom

Blucora

for

$720.0

million.

Cinven

will

bringTaxActand

Drake

Software,

a

Cinven

portfolio

company,together

tocreate

a

full-service

tax

solutions

provider

forprofessionals

and

consumers.

The

sale

ofTaxActallows6Blucora

tofully

shift

its

focus

intowealth

management

witha

rebranding

toAvantax,

concentrating

on

tax-focusedwealth

management.7Take-privates79take-privatesabove$100

millionwereannounced

orcompletedin2022.Of

those79,

34

werePE-ledand

below$1

billioninsize,showingthatas

marketcaps

dropped

intothemiddle-marketterritory,sponsors

tookadvantageoftheopportunity

totakethese

firms

private.Public-to-privateLBOPEdealactivity9694949494848379767066$44.72012$96.02013$49.92014$143.12015$68.22016$101.22017$117.0$135.62019$65.82020$197.82021$224.32022*2018Deal

value($B)Deal

countSource:

PitchBook

|

Geography:

North

America

&Europe*AsofDecember

31,

20225:

“TreeHouse

Foods

Completes

Sale

ofSignificant

Portion

ofIts

Meal

Preparation

Business

toInvestindustrial,”

PR

Newswire,

October

3,

2022.6:

“Cinven

toacquire

TaxAct,”

Cinven,

November

1,

2022.7:“Blucora

Announces

Closing

ofTaxActSale,”

GlobeNewswire,

December

19,2022.92022

ANNUAL

US

PE

MIDDLE

MARKET

REPORTDEALSSponsored

byTake-privatedealsunder$1billionin2022*CompanyAnnounced

date

(2022)December

15October

28October

26October

24October

24September

26September

4August

21August

16July26Acquirer(s)Deal

value

($M)%

discount

52-week

high-35.1%-42.6%-25.5%-54.0%28.8%-6.4%TreanInsurance

GroupPushpayAltaris

Capital

PartnersBGH

Capital,

Sixth

Street

PartnersK1

Investment

ManagementBDT

&

Company$316.0$902.2$307.7$222.2$158.07$262.4$725.0$734.8$234.6$239.4$170.0$134.9$102.0$824.1$993.6$890.0$178.2$751.1Elmo

SoftwareWeber

Inc.AgroFresh

SolutionsSemconPaine

Schwartz

PartnersRatos

GroupChannelAdvisorNearmap

AustraliaTedBakerCommerceHub,

Insight

PartnersThoma

Bravo-21.5%-15.6%-28.2%-23.8%-16.4%-3.9%Authentic

Brands,

Blackstone,

CVCElliott

Management,

Hochtief,

ThiessAurora

Capital

PartnersAlpha

Associates,

Peninsula

InvestmentsEdmond

de

Rothschild

GroupCVC,

Nordic

CapitalDBAYAdvisorsMacaSharps

CompliancePrima

IndustrieOncodesign

ServicesCary

GroupJuly12July

10July

1015.2%June

28-21.2%-12.5%-56.5%-4.3%CareTechHoldingsRadius

HealthJune

27June

23Gurnet

Point

Capital,

Patient

SquareAareon,

Advent

InternationalKinetic

GroupMomentum

Software

GroupThe

Go-Ahead

GroupEcoOnlineJune

20June

1327.3%June

2Apax

Partners$389.9$321.9$226.6$286.0$385.0$283.8$580.0$372.0$812.7$570.0$249.0$698.0$912.2$241.0$132.9$302.5$311.8-21.0%-46.4%21.3%Mercell

HoldingCAST

SoftwareTrecoraResourcesPoints

InternationalHemisphere

Media

GroupOcean

Outdoor

UKGTY

Technology

HoldingsBlueknight

Energy

PartnersTufinMay

25Thoma

BravoMay

17Bridgepoint

AdvisersBalmoral

FundsMay

1130.3%May

6Plusgrade,

CDP,NovacapInterMedia

PartnersAtairos29.9%May

6-50.1%9.5%May

3April

29GI

Partners-21.5%10.7%April

21ErgonApril

6Turn/River

Capital-0.5%Manning

&

NapierVirtus

HealthApril

1Callodine

Group26.1%March

14March

9BGH

Capital31.8%Stagecoach

GroupIntriConDWS20.7%February

28February

14February

2Altaris

Capital

PartnersACS

Group-13.9%9.1%Volt

Information

SciencesSOC

TelemedPatient

Square

Capital-68.4%-13.2%MedianSource:

PitchBook

|

Geography:

North

America

&Europe*AsofDecember

31,

2022Note:This

table

includes

only

deals

of

$100

million

or

more.

“Nonbank”

indicates

deals

usingprivatedebt,

all-equity

structures,

or

those

not

broadly

syndicatedbybanks.102022

ANNUAL

US

PE

MIDDLE

MARKET

REPORTDEALSSponsored

byB2Bmarket

with

opportunities

toconsolidate

market

share

andscale

businesses.

Industrials,

one

ofthe

major

verticals

withinthe

B2B

space,

includes

manufacturers

ofheavy

equipment,building

materials,

electrical

components,

transportationvehicles,

and

infrastructure,

as

well

as

services

related

tothese

manufacturing

processes.

While

rising

input

costschallenge

dealmaking,

sponsors

are

likely

toseek

opportunitiesin

the

middle

market

tostrategically

expand

their

platformcompanies

and

pick

up

divestures

ofnoncore

assets.

InNovember,

HIG

Capital

acquired

the

distribution

business

ofAvient

Corporation

for

$950.0

million.

HIG

Capital

renamedthe

businesstoFormerra

and

plans

toaccelerate

its

growth

asan

independent

business

and

leader

in

polymer

distribution.Ongoing

attention

tostrengthening

the

supply

chain

remainsa

keydriver

ofdeal

activity

for

B2B,

and

the

increased

desire

tonearshore

operations

could

further

boost

investor

attention

inthe

space.B2B

deal

activity

remained

resilient,

and

B2B

was

one

oftwosectors

that

saw

positive

growth

in

its

share

oftotal

middle-market

deal

activity,

with

the

other

being

financial

services.In

2022,

there

were

1,423

B2B

deals

for

an

aggregate

of$173.4

billion

in

value.

Despite

the

dip

in

YoY

deal

activity,

thesector’s

share

ofmiddle-market

deal

count

increased

2.5%while

its

share

ofdeal

value

jumped

3.7%.

B2B’s

share

ofmiddle-market

dealmaking

was

above

its

five-year

average,demonstrating

the

sector’s

relative

strength

against

othersectors

during

periods

ofmarket

volatility.

The

sector,

whichcomprises

a

broad

mix

ofprimarily

nontech

and

service-oriented

businesses,

spans

everything

from

manufacturingtoprofessional

services

t