Even Tech M&A Shows Signs of Upcoming Weakness

Expectations for tech M&A in the short term are much lower than previous polls, but activity may pick up again in the long run

Deal flow in the technology, media and telecommunications (TMT) sector has remained robust despite a decline in overall M&A activity, but that may be about to change, at least in the short term, according to Mergers & Acquisitions’ Mid-Market Pulse (MMP). (See related graphic).

Survey participants gave the TMT sector a three-month score of 63.0, nearly 17 points lower than six months earlier. The results suggest that even healthy sectors may take a hit in the first months of 2016. While a rising tide may float all boats, the opposite may also be true, especially in the wake of higher interest rates.

In the case of tech – which boasts deal-driving developments including cloud computing, mobile devices and e-commerce –dealmakers expect activity to pick up again, as indicated by the 12-month score of 79.2 for the sector.

The MMP is a forward-looking sentiment indicator, derived from monthly surveys of approximately 250 executives and published in partnership with RSM LLP (formerly McGladrey).

Previous sector forecasts include financial services, health care, energy, manufacturing and consumer goods & retail.


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