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Big surge in technology M&A deals in the UK

Microscope contributor

By Billy MacInnes


Corporate merger and acquisition (M&A) deals in the UK technology sector rose by a third in the second quarter of 2010, making it the most acquisitive technology sector in Europe and second only to the US globally.


According to the Global technology M&A update from Ernst & Young, there were 40 deals in the UK in the second quarter, compared to 30 in the same period last year, and 32 in the first quarter of 2010.


Of the 40 deals in the second quarter, half were international M&As. Commenting on the report, Ernst & Young UK Technology Transactions Partner Neil Hutt said mergers and acquisitions were back on the agenda for most businesses and it was "great to see so much M&A activity in the UK at the moment".


Globally, there were seven deals in the second quarter above the $1bn mark but there were many small strategic transactions. Hutt said there were three industry "megatrends" driving the activity - "the global shift to a "smart" economy; the increasing "mobilisation" of business and personal productivity tools and applications; and the '"blurring" of sector and industry boundaries, including consolidation".


Despite an uncertain short-term outlook for technology M&A deals, Hutt argued the trends driving deals in the technology sector were "not likely to abate soon".


The report also found a dramatic rise in private equity deals year on year from $646m in the second quarter 2009 to $5bn in 2010.


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