Global merger and acquisition activity in the technology sector rose sharply in 2012, but the value of the transactions accomplished declined, according to a new report.
The study from market researchers International Data Corp (IDC) found that the total number of deals done last year rose 14.2 pc to 3,800, but the value of those deals fell more than 10.8 pc for the year to 211.0 billion dlrs. Moreover, deal volume declined in the course of 2012.
Ryan Patterson, manager of IDC's Global IT Advisor and Private Vendor Watch Service, said the opposing trends between deal volume and value didn't come as a surprise. "In a slow economy, we typically see an increase in the number of deals and lower values, driven by 'fire sales' of local companies," he said in a press release. He also cited more asset sales by companies refocusing on their core business and increased buying of relatively cheap assets by private equity firms.
Globally, the enterprise applications market accounted for the biggest share of global deal value; 50.5 billion dlrs. Mobile deals, worth a combined 40.1 billion dlrs, were second. The US remained the main market for tech m&a with 2,200 deals with a combined deal value of 132.8 billion dlrs
The IDC study said private-equity backed m&a activity jumped 27.8 pc to 230 deals in 2012, with total value of those deals rising to 43.0 billion dlrs from 39.2 billion dlrs in 2011.
IDC said there was a burst of m&a activity in what it calls the "3rd platform," which is built on the four pillars of cloud, mobile, big data and social technologies. The researchers tracked 710 deals associated with these four pillars, up 18.6 pc from 2011. They said they expected the 3rd platform to be an important driver of future m&a activity.