Global technology M&A update: 3Q11 highlightsTrends driving deal activity and value Can such robust technology M&A values be maintained in the face of continued macroeconomic uncertainty and extreme equities markets volatility? - Cloud computing, smart mobility, information security and social networking continued to dominate deal-driving trends. In fact, as time passes we're seeing technologies related to these trends more integrated with each other — and with just about everything else.
- Health care IT deal volume continued strongly, including a big-ticket $2.2 billion deal.
- Business intelligence/analytics deals increased in the quarter, expanding across a range of applications and industry uses.
- Internet and mobile video technologies, online and mobile games, solar energy technology and the integration of social networking functions into a range of other technologies also drove deals in the quarter.
- At 759 deals, 3Q11 volume was 8% higher YOY but 2% down from 2Q11 (777 deals) and 4% down from 1Q11 (794 deals).
- Although it was up 13% YOY, corporate deal volume has been declining since the beginning of the year, to 678 in 3Q11 from 701 in 2Q11 and 721 in 1Q11.
- Although they were down 18% YOY, PE deals have been climbing in 2011, to 81 in 3Q11 from 76 in 2Q11 and 73 in 1Q11.
- Our observed long-term directional correlation between deal volume and the NASDAQ Composite Index continued: the index fell 13% in 3Q11.
- Aggregate announced deal value was $56.4 billion in 3Q11 — an increase of 22% YOY, 8% sequentially and the highest total for any calendar quarter since 2007.
- At $221 million, the average value of deals increased 26% YOY (from $176 million in 3Q10) and 14% sequentially (from $194 million in 2Q11).
- Two deals topped $10 billion in 3Q11 for the first time since the first quarter of 2000, which had three $10+ billion deals. In addition, average value was the highest since that same 2000 quarter (just before the dot-com bubble burst).
- PE deal-makers increased values the most in 3Q11: aggregate value of PE deals increased 86% YOY and 82% sequentially to $14.6 billion in 3Q11, the highest quarterly total since the first half of 2007. Average value of PE deals increased 153% YOY and 74% sequentially to $584 million in 3Q11.
- The aggregate value of corporate deals rose 9% YOY but fell 5% sequentially to $41.8 billion; the average value of corporate deals climbed 8% YOY and 1% sequentially to $182 million.
- By sector, deal volume (combined corporate and PE) grew YOY in every sector except internet (-9%) and software (-5%).
- Sequentially, all sectors increased in deal volume except internet, which was flat, and software, which declined 22% following a 2Q11 spike.
- At 277 deals, CB deal volume was 36% of all 3Q11 deals, down from 40% in 2Q11 but still ahead of 34% in 1Q11 and for all of 2010.
- The aggregate value of CB deals was $21.3 billion, or 38% of aggregate value in the quarter (CB and IB), compared with 46% in 2Q11.
- The average value of CB deals declined sequentially (-2%) and rose 6% YOY. This was a lower performance than all deals (CB and IB) (see second "Deal value" bullet above), following two quarters in which CB average value grew faster than that of all deals.
<< Previous | Next >> A directional view of select 3Q11 deal-driving trends Total number of all announced deals Source: Ernst & Young analysis of FactSet Mergerstat data, accessed 6 October 2011. Global technology transactions scorecard, 3Q11 Source: Ernst & Young analysis of FactSet Mergerstat data, accessed 6 October 2011. Deals by sector based on value and median premium, 3Q11 Source: Ernst & Young analysis of FactSet Mergerstat data, accessed 6 October 2011. Cross-border deal value flow for technology deals (disclosed value), 3Q11 versus 2Q11 Source: Ernst & Young analysis of FactSet Mergerstat data, accessed 6 October 2011. ContentRelated contentNewsExecutive bytes Download For transaction support |
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