M&A
Disruption, Competition to Fuel Tech M&As in 2017
In the face of competition and tech disruption, industry execs will continue to turn to mergers and acquisitions. Economic fundamentals will also be a factor.
Strengthening Earnings Forecast
75% of tech industry execs express confidence in their organizations’ upcoming corporate earnings, up from 60% who felt this way a year ago.
The Hunt for M&As
50% said their companies intend to pursue M&A deals in the next 12 months, with 38% indicating they have more than five deals in the pipeline.
Expectations for Global Tech M&A Market
29% said the global tech industry M&A market will improve over the next 12 months, but that’s down from 80% who said this a year ago.
M&As: Expansion Plan
28% said they’d primarily pursue M&As in their current sector to grow market share, and 20% said the top M&A driver is the need to move into new geographies.
Inflated Worth
68% said that, during M&As, sellers’ expectations of transaction valuations are higher than that of buyers; just 2% said no such expectation gap exists.
M&A Metrics
54% said they use analytics and big data solutions during M&As to better identify synergies and determine appropriate valuations of the targeted asset, and 53% said they take advantage of these tools to identify growth options and potential targets.
M&As as Expansion Engines
59% said their companies’ growth will be organically driven, while 22% said M&As will drive growth.
What Causes Shake-Ups?
49% view digitization as a top force in the disruption of their core business, while 48% cite sector convergence/increased competition from companies in other sectors.
Staffing Strategies
73% said that, in terms of their employment/talent planning, that they are focusing on shifting internal skills/talent to gain efficiencies from greater automation, as opposed to 53% who said they are looking to create jobs/hire talent.
Lowered Expectations
Just 17% said the global economy will improve in the near future, down significantly from 80% who predicted this a year ago.