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Telecoms resellers target for private equity backers

Simon Quicke

Evidence of a resurgence in technology M&A activity continues to stack up with the third report predicting a recovery in the market this year arriving in the space of four days.

Adding to forecasts of improvements in the market this year from Regent and Ernst and Young the latest survey of the M&A landscape from Clearwater Corporate Finance also highlights a strong end to 2009 going into this year.

Clearwater's half-yearly report, The Wire, which tracks private equity activity in the UK tech sector reported a total of 39 private transactions last years which could be broken down into 23 buyouts and 16 exits.

Private equity contributed 29% of the overall frequency of technology deals last year, an increase of 20%.

Emma Leathley, senior technology analyst at Clearwater, said that after an initial period at the start of last year of "wait and see" the tech sector had held up, better than other sectors.

""This was thanks in large part to stabilising business valuations resulting in a number of exits, and revenues amongst technology companies faring well despite the economic backdrop, prompting investment activity," she said.

Clearwater said the targets for investors included telecoms resellers and those selling into the healthcare market.

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