Total number of all announced deals

Source: Ernst & Young analysis of FactSet Mergerstat data, last accessed 8 April 2011.

Total and average deal values ($m), for deals with disclosed values

Source: Ernst & Young analysis of FactSet Mergerstat data, last accessed 8 April 2011.

"We're anticipating a strong year for M&A, with multiple disruptive innovation trends — from smart mobility to cloud computing and social networking — overcoming economic uncertainty to create opportunity for strategic and financial buyers."Joe Steger, Global Technology Transactions Advisory Services Leader

Technology mergers and acquisitions (M&A) started strong in the first quarter of 2011, with many transactions driven by technology innovations including cloud computing/software-as-a-service (SaaS), social networking, mobile communications and information security.

1Q 2011 highlights

• Aggregate value of all disclosed value deals more than doubled year-over-year (YOY) to $27 billion but dipped 10% sequentially.
• Deal volume increased 26% YOY and 13% sequentially — the eighth consecutive quarter without a decline.
• Private equity (PE) deals volume increase 30% YOY and 20% sequentially, but total value is flat YOY and drops 62% from 4Q10.
• At $11 billion, disclosed cross-border (CB) deal value is 40% of total deal value, consistent with 41% of deal value for 2010.

Technology disrupts as confidence returns

"Many of the technology innovations driving transactions in the first quarter aren’t brand new. Yet their impact is becoming visible at the same time as uncertainty is receding from the global economic downturn and confidence is returning," says Joe Steger, Global Technology Transaction Advisory Services Leader at Ernst & Young.

That combination — increased confidence and the visible impact of innovative technologies — is behind the resurgence in global technology M&A, Steger believes. Technology companies who aren’t on the forefront of implementing and leveraging these relatively recent innovations are looking to catch up by acquiring those who are.

Trends driving 1Q 2011 deals

"Technologies like cloud computing, SaaS, smart mobility and social networking are changing consumer lifestyles and causing companies to re-examine or re-invent their business models," Steger explains. These are the overarching trends that drove global technology M&A in 1Q 2011.

M&A outlook continues positive

Given the confluence of rapidly changing technologies affecting businesses and business models in 2011 — and given the strong start represented by 1Q11 — we continue to anticipate strong M&A growth for the remainder of 2011. In fact results so far bear this out, based on an interim check at the beginning of June of the FactSet Mergerstat data for the second quarter.

Dive deeper into 1Q 2011 M&A

The following pages offer more detailed statistics and analysis excerpted from Ernst & Young’s Global Technology M&A update, January — March 2011

• First quarter M&A by the numbers
• First quarter M&A unfolds robustly
• What’s driving technology M&A deals
• Preparing for successful transaction integration in global technology

Next >>

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