August 2, 2013

PwC: Technology M&A activity on the rise

Technology mergers and acquisitions can have long-lasting, positive effects on both companies involved in the transaction. When two businesses that have complementary goals and ideals, and even a similar customer base, are able to come together on agreeable terms, it will bode well on many levels. While this blog often discusses specific M&A activity, recent research shows that technology mergers and acquisitions on the whole will increase for the remainder of 2013.

According to PricewaterhouseCoopers (PwC), the second quarter ended with 32 transactions completed, compared to 41 deals in the first quarter. However, mergers and acquisitions were more profitable in that time. The average deal value increased to $433 million from the first quarter average of $253 million. Also, the number of deals in excess of $250 million doubled from 17 percent to 34 percent.

Out of the deals that occurred in the second quarter, 33 percent were internet-based, generating a total of $4.5 billion. Hardware deals comprised one-quarter of all deal activity with eight transactions totaling $2.9 billion in deal value. 

"Technology companies face the constant conundrum of a need to balance key investment initiatives while navigating fears of future downturns amid signs of positive economic growth," Rob Fisher, PwC's U.S. technology industry deals leader, said in a company press release.

Fisher added that even though the number of closed technology transactions declined in the second quarter, the amount of new deal transactions point to robust M&A activity for the rest of the year. As technology players identify new avenues to fuel growth, Fisher explained that PwC anticipates the rise in proposed transactions will invigorate the entire sector for the rest of the year.