Merger and acquisition (M&A) activity in New Zealand remained high in the first quarter, with private equity investors again featuring prominently, PwC said.
Corporate activity in the education technology sector is booming and PwC said it was not seeing any signs of a slowdown.
Deal volume is in line with levels seen throughout 2021 - a record year, PwC said.
A number of 2021 deals also continued into 2022 and have been announced in this first quarter.
Healthcare and educational technology featured strongly in the data.
Significant levels of deal activity continued during the first quarter of 2022 with 45 deals completed or announced.
"While this is below the numbers we saw in Q2, Q3, and Q4 of 2021, it is still considerably higher than pre-pandemic levels and more than Q1 2021," PwC said.
Regan Hoult, corporate finance leader at PwC told the Herald M&A activity had driven by a combination of factors.
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Advertise with NZME."Looking at the data, there has been strong international interest.
"The other theme that came through was strong private equity activity throughout the quarter.
"We continue to see private equity, both on the demand side of transactions - being big acquirers of businesses and also ultimately suppliers of businesses," he said.
Low interest rates have helped corporate balance sheets and how they look at acquisitions.
"Institutions are looking at private equity as an asset class that can provide strong returns against the other asset classes, which ultimately flows through into deal activity.
"Yes, there are definitely headwinds around inflation, supply chains, rising interest rates and the geopolitical situation, but there is still a lot of private equity capital looking to invest," Hoult said.
Corporates "may sit on their hands", focus on their balance sheets, and look at their strategy in the current environment.
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"With the challenges that come up through supply chain issues and inflation, consolidation can often be something that can drive value," he said.
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Advertise with NZME.In its report, PwC said that in education technology (ed tech), products that demonstrate improved learning outcomes and means of adapting learning to changing learner and teacher expectations are increasingly sought after.
Since the beginning of the Covid-19 outbreak in early 2020, PwC has advised on three New Zealand based EdTech transactions with international investors - Totara Learning, Education Perfect, The Mind Lab.
Buyer interest in the sector was not showing any signs of reducing
PwC expects to see robust deal activity continue throughout 2022 due to the significant amounts of capital still available in the market.
"Strong valuations and increasing market uncertainty may lead to business owners wanting to accelerate the timing of exits."
PwC cross-border deal flow was strong in the quarter - 20 of the 45 deals involved offshore buyers.
Australia (nine deals) and the USA (six deals) continued to drive international buyer activity.
The technology, media and telecoms (TMT) sector continued to see the most activity, while financial services and industrials and chemicals also featured prominently.
TMT (14 deals) accounted for almost a third of all activity during the quarter.
Nine of the 45 deals announced during Q1 2022 involved a private equity buyer.
Over the last couple of years M&A activity in the healthcare sector had significantly increased and valuations were higher than ever before, PwC said.
There have been a number of substantial transactions in recent months including the sale of Evolution Healthcare, Canopy Cancer, Fertility Associates, Pacific Radiology, Obex Medical and The Selwyn Foundation's aged-care assets.
Work on healthcare-related transactions in the past year would represent circa 20 per cent of PwC's M&A related work.
"Covid-19 has heightened investor awareness in the healthcare sector and the importance of the health system, leading to increased interest and activity," the report said.
