Technology M&A
July – September
2016 first look

Digital transformation marches on

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Tech and non-tech companies alike are being disrupted by innovative digital technologies and are turning to M&A in search of solutions. That fueled another blockbuster quarter for global technology M&A during 3Q16.

Volume: At 911 deals, 3Q16 volume fell 12% sequentially and 15% year-over-year (YOY).

Value: With US$155.5 billion in disclosed value, 3Q16 became the third-highest aggregate value quarter on record, pushing 2Q16 to fourth.

Big-ticket deals: 3Q16 had 32 deals at or above US$1 billion.

PE buyers: PE tech dealmakers drove a second consecutive record high for aggregate quarterly disclosed value of US$36.1 billion.

Blur: Non-tech-buyer disclosed value soared, more than tripling YOY to US$55.2 billion.

Hidden gems: Fewer companies divested potential hidden gems in 3Q16, but disclosed value more than doubled to US$39.4 billion.

Cross-border (CB) deals: At $80.8 billion, 3Q16 established a new quarterly record for CB disclosed value.

 

This update gives you a quick first look at third-quarter 2016 global technology M&A. Our comprehensive quarterly report will follow.

  • Report methodology
    • Our 3Q16 First look M&A update is based on EY’s analysis of The 451 Group M&A KnowledgeBase data. Deal activity and valuations may fluctuate slightly based on the date the database is accessed.
    • Technology company M&A data was pulled from The 451 Group M&A KnowledgeBase based on the database’s own classification taxonomy and then deals were aligned to the following sectors: communications equipment (CE); computers, peripherals and equipment (CPE); semiconductors, software/SaaS, IT services and internet companies. Alignment was based on the sector of the target company.
    • The data includes M&A transactions between two technology companies as well as non-technology companies acquiring technology companies.
    • Joint ventures were not included.
    • Equity investments that involved less than a 50% stake were not included in the data.
    • PE M&A activity includes both full and partial stake transactions in excess of 50% and was analyzed based on acquisitions by firms classified as private equity, sovereign wealth funds, investment holding companies, alternative investment management groups, certain commercial banks, investment banks, venture capital and other similar entities.
    • Unsolicited technology deal values were not included in the data set, unless the proposed bid was accepted and the deal closed based on data available at the time of analysis.
    • All dollar references are in US dollars, unless otherwise indicated
    • In this report, disclosed deal values may vary from other published values because The 451 Group database methodology automatically subtracts cash acquired, net of debt, from enterprise value. Additionally, announced deal values are often subject to change at the time of close, due to subsequent revisions to the terms of the deal and/or changing stock valuations to the extent stock was used as a deal consideration.
    • “Total value” refers to the aggregate value of deals with disclosed values for the period under discussion.

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