Technology deals soar to US$119 billion in 2010: Ernst & Young
(Toronto – 15 February, 2011) The push towards smart technology was one of the biggest factors that drove global M&A deal value to US$119 billion in 2010, according to a recent report by Ernst & Young.
“Last year’s deals reflect the demand for smart everything. We’re talking about smartphones, tablets and other mobile devices and infrastructure,” says Karen Atkinson, Partner and National Technology Industry Leader with Ernst & Young. “But information security, cloud computing and social networking also spurred dozens, if not hundreds, of deals. All these trends are expected to continue driving technology M&A growth this year.”
According to Ernst & Young’s Global technology M&A update: October–December 2010 and year in review, the firm finds that:
- Canadian companies made 83 deals in 2010, up from 71 in 2009.
- Total global technology M&A deal numbers were up 41%, increasing to 2,658 deals from 1,886 in 2009.
- Full-year total M&A value was US$119 billion, a 26% increase compared with US$94.8 billion in 2009.
- Disclosed value of private equity deals more than doubled to US$19.7 billion in 2010.
The number of small deals spiked in 2010. There were 26 deals above the US$1 billion mark and a whopping 216 deals above US$100 million, compared with 19 and 132, respectively, in 2009. Companies consistently gobbled up multiple small firms of related technology to take advantage of key technology trends and rapid innovation.
“Established organizations often see small companies and startups as giant R&D laboratories,” Atkinson notes.
Cross-border deals grew to 34% of all deals, up from 31% in 2009, as companies looked to pursue growth via international expansion.
What’s more, the concentration of total value in last year’s top 10 deals decreased to 28% (of all disclosed value) from 42% in 2009, suggesting that deal-making strength and confidence are spreading more widely throughout the technology industry.
“Several other factors suggest 2011 will be another strong year for global technology M&A,” says Atkinson. “New waves of technology innovation around smart mobility, cloud computing and social networking, as well as growing stockpiles of cash on technology companies’ balance sheets, will continue to fuel deal activity in 2011.”
The full Ernst & Young report can be found at ey.com/ca/technology.
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