Global technology M&A update: 1Q15

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Will record-setting technology M&A ever slow? Not soon, by our forecast, especially since 1Q15 set new post-dotcom-bubble records for quarterly value and volume.

Technology-enabled digital transformations disrupting multiple industries is the primary force that drove the quarter’s strategic dealmaking, by corporate technology and non-technology buyers alike.

One result: further blurring of boundaries between tech and other industries. The quarter also featured a return of big-ticket corporate deals but a decline in private equity (PE) activity. In all, there were 15 deals above $1 billion.


  • 1Q15 aggregate value of disclosed-value deals hit $77.1 billion, higher than any quarter since 2000. That’s up 16% year-over-year (YOY) and 72% sequentially.
  • Quarterly deal volume climbed to 981 deals in 1Q15. That’s up 29% YOY, 2% sequentially and a fifth consecutive post-dotcom-bubble quarterly record.
  • The internet of things (IoT) and health care IT (HIT) were the biggest deal-value drivers of 1Q15, followed by cybersecurity, financial and payment technologies, smart mobility and the cloud. IoT accelerates cross-industry technology blur by adding network-enabled digital sensors to other industries’ everyday products.
  • PE volume and value declined, while non-technology buyers increased value, again, after a strong 4Q14.
  • Cross-border (CB) aggregate deal value more than doubled YOY and jumped 59% sequentially; it captured a 42% share of total quarterly value.

Deal-driving trends

Technology M&A buyers are pursuing consolidation for scale and strategic growth, all in the context of ongoing disruptive digital transformation.

HIT average value topped our deal-driving trend “bubble” chart in 1Q15, but only because of a single deal that topped $10 billion.

Meanwhile, IoT tripled in aggregate value over 4Q14 on the strength of several IoT-flavored semiconductor sector consolidation deals. Likewise, values for security, big data, payment and financial technologies, smart mobility and cloud/SaaS also rose over the previous quarter, but values for gaming and advertising and marketing targets declined.

Again, we saw the “stack to solution” trend in evidence across all these technology targets. Corporate dealmakers appear to be pursuing comprehensive customer solutions, building on earlier focuses in one or more portions of the technology “stack.” This was especially true in IoT- and security-driven deals

A directional view of select 1Q15 deal-driving trends

EY - Chart 1Q15 deal driving trends

Global technology transaction scorecard

Corporate buyers returned in force for 1Q15, propelling new post-dotcom-bubble records in M&A volume and value.

After taking what turned out to be a one-quarter “breather” during 4Q14, corporate technology buyers returned to big-ticket deals in the first quarter of 2015. What makes this doubly worth comment is that until last year, first quarters typically were weakest for global technology M&A each year. But 1Q14 set a post-dotcom-bubble 1Q record — topped only once, in 1Q 2000 when the $160 billion AOL–Time Warner merger was announced.

And now 1Q15 has climbed 16% above 1Q14, with aggregate value of $77.1 billion (the highest-ever post-2000 quarterly total). Meanwhile, PE buyers were mostly on the sidelines in 1Q15. They declined in volume and value both sequentially and YOY. But non-technology buyers more than took up the slack: at $19.5 billion, they more than doubled their 4Q14 total and increased more than six times over 1Q14.

Global technology transaction scorecard (corporate and PE), 1Q15

EY - Chart Global technology transaction scorecard

Cross-border dealmaking starts strong in 1Q15

Strategic technologies and growth through geographic expansion launched CB dealmaking to the strongest start we’ve seen yet as we kick off this eighth year of global technology M&A reports.

Seven CB deals topped $1 billion — including one above $10 billion. Unexpectedly, given the strength of the US dollar, the US was a net seller (by a wide margin).

Europe also was a net seller, but by a difference so small that both buyer and seller values rounded to the same percent. But this was largely due to one $11.8 billion semiconductor consolidation deal with a European buyer and a US seller.

In addition, Japanese companies acquired $6.1 billion in CB value, 89% of which came from European targets. In all, the 1Q15 CB aggregate value of $32.2 billion (+106% YOY and 59% sequentially) represented 42% of all-deal aggregate value. That’s slightly above the historical norm but less than 45% in 4Q14.

CB deal value flow for technology deals (disclosed value), 1Q15

EY - chart CB deal value flow

Note: all dollar amounts are US dollars.