M&As
Will Tech M&A Deals See Continued Growth in 2016?
Last year’s robust growth in tech M&As will be hard to top, reports from EY and PwC conclude. Yet their views on the outlook for this year differ slightly.
EY Report: Economy on Firm Footing
EY found that 84% of IT industry execs expect economic stability or modest growth for the year ahead, and 57% project stable corporate earnings.
EY Sees Productive Partnerships
40% of respondents to the EY poll said their company is planning alliances to create greater value from underutilized assets.
Growth Drivers
In the EY study, 53% said making better use of digital tech and analytics is a top tech priority for driving growth, while 44% cited the need to attract and retain talent.
Adjusted Expectations
According to EY, 52% said industry M&As will grow for the year ahead, but that’s down from 80% who felt this way six months ago.
PwC: A ‘Slower but Still Active’ Tech Deal Market
In Q1, there were 380 M&A deals at a value of $42.1 billion—signaling “a slower but still active technology deal market,” PwC said.
PwC Points to Nine Big Deals
Nine deals of more than $1 billion in value were announced in Q1 despite a drop in the overall volume of tech deals from Q1 2015. In the latest quarter, small deals (of less than $100 million) exceeded the 50 percent mark.
PwC Cites Surge in IT Services Deal Valuation
IT services saw nearly $15 billion in Q1 deals, boosted by five transactions valued at more than $1 billion. Overall, the number of deals in IT services totaled 105 in Q1.
PwC: Software Deals See Highest Volume
Software deals saw the highest volume in the technology sector in Q1, with 174 transactions.
EY: Pending Proposals
While 84% of participants in the EY study said their companies have two or more transactions in their pipeline, the same percentage said their company is ready to walk away from deals that don’t meet their scrutiny.
EY: Elusive Agreements
Just 42% express positive sentiments about the likelihood of closing acquisitions for the year ahead, down from 62% six months ago, according to EY.
EY: Quality of Acquisition Opportunities
Only 47% of respondents to the EY survey said they feel good about the quality of acquisition opportunities, down from 75% six months ago.