Tech Companies' Appetite for Acquisition Increases

By Dennis McCafferty

After a strong 2014, merger and acquisition (M&A) market is expected to keep growing this year, according to a recent survey from KPMG, an audit, tax and advisory firm. The vast majority of tech companies included in the study expect to make no less than one acquisition in 2015, but a notable share anticipate making at least a dozen. Mobility, data/analytics advancements, cyber-security and the cloud are fueling this trend, as tech companies seek intellectual assets and tech talent to sharpen their competitive edge. It doesn't hurt, of course, that the IT industry can take advantage of a wealth of available cash reserves to make these deals happen. To ensure successful M&As, tech organizations will seek to incorporate effective integration plans, while fine-tuning their valuation strategies. (Speaking to the latter, the difference in valuation perceptions between buyers and sellers remains a key M&A challenge, findings show.) Outside of mergers, projected revenue growth drivers for the tech industry include product development and geographic expansion. KPMG provided Channel Insider with data gleaned from nearly 100 U.S.-based finance officers and M&A professionals in the tech industry who took part in the research.

This article was originally published on 2015-04-21