Technological innovations are spark of life for M&A activity
It is not uncommon for businesses to continuously evolve and implement the latest technological trends. It can not only make daily operations run smoothly, it can also ensure that customers are able to receive the best products and/or services.
As this blog has previously discussed, companies in the technology industry can sometimes see exponential profit growth when they forge with another organization. However, with tumultuous economic times, the process is not always an easy one, but with the right advising, it can be well worth it.
According to accounting firm Ernst & Young, the total value of technology mergers and acquisitions (M&A) fell 35 percent in 2012 compared to 2011. However, experts are not disheartened by this news, citing cloud computing and software as a service (SaaS) innovations as areas of success.
Joe Steger, Ernst & Young’s tech industry services leader, told the news source that while macroeconomic pressures put a slight hindrance on merger and acquisition activity, it also highlighted important issues. For example, big ticket deals were not as popular but there was strength in social-mobile-cloud, big data analytics and accelerated adaptation.
“Heading into early 2013, the short-term outlook suggests a soft couple of quarters but the long-term outlook for technology M&A remains strong, as both technology and non-technology industries have an ongoing need to adapt to disruptive technology innovation,” he told Network World.
Another trend growing in popularity is non-technology firms buying into the tech industry. For example, John Wiley & Sons, a publishing company, bought the online learning company Deltak for $220 million.
As the economy continues to recover, and technology keeps evolving, businesses across all industries can expect to see more activity in company mergers. Working with M&A advisors can ensure that if a deal is possible, it can be completed in a way that best benefits both parties. A comprehensive company valuation process will help ensure that the best acquisition strategy is reached.