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Global technology M&A update - 2Q11 highlights - Aggregate value continues to climb - EY - Global

Global technology M&A update: 2Q11 highlights

Aggregate value continues to climb

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Global technology transactions scorecard, 2Q11

Source: EY analysis of FactSet Mergerstat data, accessed 6 July 2011.

"Strategic corporate deals, private equity transactions and cross-border opportunities all contributed to the robust second quarter for technology M&A." Jeff Liu, Group Head, US Technology Lead Advisory, M&A, Ernst & Young LLP

After making a strong start in the first quarter, second quarter 2011 global technology M&A deal-making kicked up to a level not seen since 2007, before the beginning of the global downturn. Big-ticket deals dominated the quarter, driven by innovative technologies that also sparked hundreds of smaller deals.

Big trends drive technology deals — big and small

The biggest story for 2Q 2011 M&A is how trends that have been developing for several quarters yielded multibillion-dollar deals. Established companies made key consolidation plays and placed bets on cloud computing, smart mobile software, the smart grid and solar energy. These and other trends — especially security, social networking, business analytics and health care IT — also drove hundreds of smaller deals.

PE aggregate value hits four-year high

In the first quarter, private equity (PE) deal-makers had a slower start to the year from a value perspective than corporate buyers, but came roaring back in 2Q 2011: PE aggregate value was slightly more than $8 billion in 2Q11, its highest level since 2007.

Cross-border deal volume and value grows faster than in-border

We watched cross-border (CB) deals trend upward in volume and value throughout 2010, then pause in 1Q11 at roughly the same averages as 2010 (34% of all deals and 40% of aggregate value). But in 2Q11 CB deals once again grew faster than in-border (IB) in both metrics. CB deal volume in 2Q11 was 16% higher sequentially, compared with an 11% decline in IB deals, and 32% higher YOY, compared with a 19% increase for IB.

Aggregate value nearly doubled

The second-quarter global technology transactions scorecard (at right) shows that aggregate value nearly doubled sequentially in 2Q 2011 over 1Q 2011, and grew 69% YOY. Meanwhile, average value for deals with disclosed-values rose to $194 million — the highest quarterly average since the first quarter of 2000, during the dot-com boom. Deal volume, however, ticked down 2% sequentially to 777 deals, but that number represents a 24% YOY increase.

Global technology transactions
scorecard, 2Q11

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