Technology disruption fuels blockbuster third quarter for global technology M&A
New York, 17 November 2016
Tech and non-tech companies being disrupted by innovative digital technologies turned to M&A in numbers that made Q3 2016 another blockbuster quarter for global technology M&A value, according to the EY Global technology M&A report — July-September final look.
With US$155.5b in disclosed value, 3Q16 is now the third-highest aggregate value quarter on record. This marks an increase of 22% from 2Q16 and 138% year-over-year (YOY). At US$349.4b, year-to-date (YTD) aggregate value is 30% higher than YTD 2015’s all-time record pace.
Last quarter’s new record for the most tech deals at or above US$1b was surpassed in 3Q16 with 32 deals, four more than the prior record of 28 big-ticket deals in 2Q16. With total aggregate value of US$129.7b, their value more than triples that from 3Q15.
Jeff Liu, EY Global Technology Industry Leader, Transaction Advisory Services, says:
“Technology dealmaking is setting records because all buyers are motivated in the current environment. Incumbent tech companies seek deals to accelerate mobile- and cloud-driven transformations; non-tech companies seek strategic technologies; and private equity (PE) firms seek opportunity in hidden gems overlooked by many investors.”
M&A records set by private equity firms and cross-border (CB) buyers
PE tech dealmakers drove a second consecutive record high for aggregate quarterly disclosed value at US$36.1b, 40% above 2Q16’s prior record.
CB aggregate deal value soared to US$80.4b, eclipsing the prior all-time record by 85%. YTD 2016 already set a new full-year CB value record.
Third-quarter growth drivers
While semiconductor targets had more disclosed value (US$54b) than any other technology segment, several key areas experienced dramatic growth:
- Five deals above US$1b drove security to a sevenfold YOY increase in aggregate disclosed deal value to US$16.9b.
- Deals targeting smart mobility and advertising and marketing technologies quadrupled YOY in disclosed value, rising 305% and 333%, respectively.
- Internet of Things (IoT) value nearly tripled YOY on the strength of four such deals — including the quarter’s top deal by dollar value, at US$32.4b.
To view a full copy of the EY Global technology M&A report — July-September final look, visit: https://www.ey.com/GL/en/Industries/Technology/ey-global-technology-mergers-and-acquisitions.
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About the EY Global technology M&A report — July-September final look
The July-September 2016 issue 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. The full report is available at ey.com/GL/en/Industries/Technology/ey-global-technology-mergers-and-acquisitions.