Tech, Media, Telecoms

Advisers who understand your sector

Large tech players have substantial cash reserves available for acquisitions and are willing to pay for the right businesses as they look to build and consolidate in areas including Software-as-a-Service, Artificial Intelligence, Machine Learning, Data Analytics, Digital and Performance Marketing, and IP-based technology.

PE firms are also showing a very high interest in the sector due to the opportunities for high growth and access to recurring revenue streams, and the latest estimates are that PE firms will acquire over 900 technology companies in 2017.



Key tech, media, telecoms market themes for 2017:


PE Buyers are Setting the Tone in the Market

Between direct and bolt-on acquisitions, private equity buyers are forecast to purchase c. 900 technology companies in 2017. Private equity remains a favoured asset class for institutional investors and the recycling of distributions from successful exits into new capital has led to a fundraising surge, generating substantial dry powder.


Cloud Transformation Fuels Activity in Software

As the enterprise market continues to slowly transition to the cloud, the requirement to support hybrid IT environments will drive M&A activity as larger players seek to broaden and deepen their product/service portfolios.


Rejuvenated Funding Market for Deep Tech

Investments in IP-based technology companies have significantly increased in volume, across traditional sectors such as semiconductors (e.g. Graphcore, Kalray, UltraSoC), as well as more visionary areas such as flying cars (e.g. Lilium), microsatellites (e.g. ICEYE) and simulated worlds (e.g. Improbable). This environment seems likely to produce significant M&A targets in the near future, that would be expected to command high strategic prices.


Chinese Buyers Continue to Make Presence Felt

As part of the country’s One Belt, One Road initiative, China continues to support and modernise its traditional manufacturing industries through the acquisition of Western technology companies. This aggressive strategy has seen several deals fall foul of national regulators, such as the decision to block the €780m sale of German chip equipment maker Aixtron to a consortium of Chinese investors.


Corporates Seek to Raise Visibility Over Targets

It is becoming increasingly common for trade buyers to establish venture capital arms, as a means of enhancing their visibility and understanding of the innovation taking place in their operating markets, as well as to deepen their pipeline of M&A targets. A nominal co-investment can often prove a cheap way of obtaining optionality over whether to acquire a potential target.

International M&A trends & market analysis

The following tech, media, telecoms sector market data and commentary are produced by our market research team and global tech, media, telecoms sector specialists as part of our semi-annual all sectors global report. The data is organised into all tech, media, telecoms businesses valued over $5m “All Market” and tech, media, telecoms businesses valued in the range $5m to $150m the “Lower-Mid Market”.

Historic valuation trends:
The following chart shows international tech, media, telecoms sector business valuations over time, based on semi-annually averaged transactional data:

TMT sector tev ebitda.jpg


Regional valuation variation:
The following chart shows international tech, media, telecoms sector business valuations by region, based on listed company multiples as at mid August 2017: 

TMT regional tev ebitda.jpg


Sub-sector valuation variation:
The following chart shows international tech, media, telecoms sector business valuations by sub-sector, based on listed company multiples as at mid August 2017:

TMT sub-sector tev ebitda.jpg