Global technology M&A deals hit new record
2013 was a massive year for technology, with innovations such as the cloud and Software-as-a-Service (SaaS) gathering steam at an irrepressible pace.
It is perhaps not surprising, then, that the market for mergers and acquisitions (M&A) in the global technology sector reached new heights last year, according to Ernst & Young (EY). The professional services firm's 'Global technology M&A update: October – December 2013 and year in review' report revealed the full-year aggregate value for mergers and acquisitions in the industry was an impressive AUD$209.2 billion.
According to EY, this is a post-dotcom bubble record and represents a massive 65 per cent increase in value from 2012.
The 'big ticket' M&A deals from last year – namely those worth US$1 billion or more – were driven largely by the advent of disruptive forces such as mobile, social, cloud and big data analytics. There was a total of 36 of these deals in 2013, an increase from the 28 recorded in the previous year.
It was a lucrative 12 months for M&A indeed, and Joe Steger, global technology industry transaction advisory services leader at EY, expects much of the same this year.
“A surge in confidence in the global economy by technology executives and the disruption being caused by the megatrends, despite recent stock market volatility, continued political instability and lingering valuation gaps, indicate 2014 will be a strong year for technology M&A,” he said in a February 18 statement.
He supported his view with figures from the last two quarters from 2013, which indicate there is another strong year ahead. Deal volume in Q3 and Q4 2013 averaged 711 deals per quarter, a substantial increase from the 644 recorded in the first two quarters of the year.
All signs therefore suggest that 2014 could be a profitable year for technology companies. Any business looking to step into the M&A market should take advantage of change management consulting services to ensure they get the most out of their deal.