U.S. West Coast technology companies are expected to remain the driving targets for M&A transactions in the TMT sector. Bidders are likely to come from American firms across the country, plus from Europe, Asia, and Canada.
Though a return to huge mega-mergers are not anticipated this year, given the continued uncertainty in the political environment, software companies are still heavily sought-after assets, with deal volume expected to gain new momentum.
Moreover, growing concern about cyberattacks led to an increase in interest for cybersecurity companies, with the potential for more M&A in the security technology sector. Concerns over state sponsored internet-based hacking have motivated governments across the globe to develop digital defense strategies.
Furthermore, corporate data attacks via ransomware have caused a great deal of anxiety in the information technology arena. That being said, digital transformation innovations will likely continue to disrupt markets and reinvent numerous business sectors throughout the year.
Ongoing innovation within the manufacturing, robotics and artificial intelligence industries are also likely to transform several additional commercial sectors, such as construction and defense.
Technology, Media and Telecom Market Assessment
Mergermarket (now part of Acuris) has released its global mergers and acquisitions (M&A) roundup report for the Technology, Media and Telecommunications (TMT) Sector for the first half (H1) of 2017.
Key findings from the study include:
The first half of 2017 could best be described as a departure from business as usual, with the emergence of a new world order as defined by Brexit and the Trump presidency.
These structural changes across the globe have begun to break down and reshape not only traditional political identities, but also long-standing industries, to a growing degree brought on by the prevalence of technology in our daily lives.
As advances in artificial intelligence, robotics, and autonomous vehicles, among other areas, become increasingly undeniable realities, giving rise to economic anxiety for some, the world of tomorrow now seems closer than ever.
According to the findings from their latest market assessment, some of this has already made itself evident in the TMT dealmaking environment.
In the first half of the year, despite a solid economy with low inflation, low unemployment, and plenty of highly-anticipated innovations underway, the TMT sector recorded 1,482 M&A transactions globally worth a total of $175.9 billion.
That's a 20.9 percent value drop with 84 fewer deals compared to H1 2016 ($222.3 billion, 1,566 deals), leading TMT to rank as the fourth sector globally by value.
By deal count, however, TMT saw the second highest number of deals after Energy, Mining & Utilities, boosted by the Computer Software sub-sector. Of total M&A activity globally, Software recorded 747 deals worth a total of $62.6 billion, and was responsible for 50.4 percent of TMT’s overall deal count in H1 2017 while accounting for 35.6 percent of the sector’s total value.
With its burgeoning imprint on such long-standing sectors as Financial Services, Industrials, and Medical, the number of Software deals is only expected to increase.