Following two consecutive years of substantial growth in merger & acquisition (M&A) activity in the global information and communication technology (ICT) sector, 2012 produced a more mixed set of results.<\/p>\n
According to a new study from International Data Corporation (IDC), deal volume saw double-digit gains in 2012 while deal valuations experienced a sharp decline and initial public offerings (IPOs) were nearly flat.<\/p>\n
The total number of deals topped 3,800 in 2012 and registered a solid gain of 14.2% year over year, although the quarterly trend showed deal volume slowly declining over the course of the year.<\/p>\n
In contrast, the value of disclosed deals fell more than 10.8% year over year in 2012 to $211.0 billion, but displayed steady improvement on a quarterly basis as the year progressed.<\/p>\n
“The opposing trend between deal volume and deal value is not surprising,” noted Ryan Patterson, from the IDC.<\/p>\n
“In a slow economy, we typically see an increase in the number of deals, and lower values, driven by “fire sales” of troubled companies, an increase in asset sales by companies refocusing on their core business, and acquisitions by private equity (PE) firms looking to capitalize on lower valuations.”<\/p>\n
“All of these trends were prominent in the recession years of 2008-2010. The current levels of M&A activity are far from what was experienced during those gloomy years and there are plenty of reasons to believe that the market will maintain a healthy pace in the months ahead,” Patterson said.<\/p>\n
Highlights from IDC’s 2012 global technology M&A analysis include:<\/p>\n
On a geographic basis, the US remained the main market for tech M&A activity with more than 2,200 deals in 2012. The share of US M&A activity in terms of disclosed deal value was $132.8 billion or 65.3% of the worldwide total.<\/p>\n
Despite early optimism for the IPO market, with 17 companies going public in the first quarter of 2012, the year ended with a total of 43 public debuts, just a few better than the 39 IPOs in 2011.<\/p>\n
Although the total amount raised in 2012 IPOs reached $21.1 billion, this total is almost entirely attributable to Facebook’s IPO in May.<\/p>\n
“One of the most important opportunities to surface in 2012 was the emergence of the 3rd Platform, built on the four pillars of cloud, mobile, Big Data, and social technologies,” said Dan Yachin, research director, emerging technologies, IDC EMEA.<\/p>\n
“As companies move to invest more heavily in these technologies for the future, there was a burst of M&A activity as vendors sought to position themselves for this critical shift in the market. IDC tracked 710 deals \u2013 18.6% of all M&A deals in 2012 \u2013 associated with the four technologies that constitute the new platform.”<\/p>\n
Challenging market conditions for SA corporates: Fitch<\/strong><\/a><\/p>\n