Tech M&A will fly high over next 12 months, say dealmakers

Register now

Dealmaking in the technology, media and telecommunications (TMT) sector is expected to soar over the next 12 months, according to Mergers & Acquisitions’ Mid-Market Pulse (MMP). Transaction professionals surveyed in June gave the sector a score of 82.0 for the 3-month outlook and 80.6 for the 12-month outlook, much higher than the scores of 68.5 and 68.4 given to overall M&A.

Tech deals announced recently that demonstrate the sector’s momentum include the $13.7 billion purchase of Whole Foods by Inc. (Nasdaq: AMZN), which is expected to trigger an explosion of M&A in grocery stores, delivery services and related businesses.

Private equity interest in TMT is very high. Hollie Moore Haynes, a former partner at Silver Lake Partners, closed the debut fund for her Luminate Capital Partners at $265 million.

Even PE firms “that are not considered ‘tech shops’ in the usual sense are making significant investments in later-stage technology companies; however, these are seen as technology-enabled businesses serving traditional markets, rather than pure-play technology companies,” writes Rich Lawson, the CEO of tech-focused HGGC, in a guest article for Mergers & Acquisitions. HGGC recently invested in HGGC in Denodo Technologies Inc., a developer of data virtualization software.

Fueled by fears of ransomware and other attacks, cybersecurity is driving many deals.

Honeywell International Inc. (NYSE: HON) recently agreed to purchase cybersecurity provider Nextnine.

Another development driving media deals is over-the-top technology, as reporter Kamaron Leach writes in his Finance Finesse column. One respondent to our survey also mentioned “the continued impact of OTT and streaming services” on M&A.

Other sectors expected to experience high growth, according to our survey, are energy, consumer goods and retail, and manufacturing.

Mid-Market Pulse

View Table
Printer Friendly Version