Cybersecurity, SaaS Will Accelerate Tech M&A in 2017

Register now

Mergers and acquisitions in the technology, media and telecommunications (TMT) sector will soar over the next 12 months, as companies in a wide array of industries seek to improve efficiency in business processes and increase protection against cyberattacks, according to Mergers & Acquisitions’ Mid-Market Pulse (MMP). The MMP is a forward-looking sentiment indicator based on a monthly survey of approximately 250 middle-market M&A professionals and published in partnership with CT, a provider of business compliance and deal support services. (Read the full report).

Survey participants gave the TMT sector a composite score of 75.1 for the 3-month outlook and a score of 72.5 for the 12-month outlook. Companies in many industries, including retail, manufacturing and financial services, are hoping to update their business processes with innovations, including cloud computing and Software-as-a-Service (SaaS).

Companies are also looking to manage and analyze data better and to protect themselves from cyberattacks, which have grown increasingly prevalent. All of these trends are raising the value of tech companies, placing strategic buyers and private equity firms in fierce competition for the best technology targets.

The scores for overall M&A, at 71.0 for the 3-month outlook and 72.4 for the 12-month outlook, were the highest since mid-2015, reflecting respondents’ optimism about dealmaking in 2017.

Participants predicted that Republican control of the federal government will translate into lower corporate taxes and fewer regulations, and those developments will fuel M&A in general. Other sectors that scored particularly high on the MMP were: energy; manufacturing; financial services; and consumer goods and retail.

For reprint and licensing requests for this article, click here.