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Tech M&A activity continues to recover

Simon Quicke

The level of mergers and acquisitions activity in the tech market has been in recovery for three quarters after hitting a low point last year at the height of the recession.

In a survey of M&A activity in Q2 from Regent the trends of the last seven years show that market activity might not have recovered to the heights of 2006/07 but it was close to reaching the pre-recession levels enjoyed in 2008.

The UK, US and Scandinavia is leading the recovery with M&A levels up 12% in Britain on the first quarter.

"These figures do indicate a level of confidence amongst the industry that now is a good time to implement expansion plans and perhaps use some of the surplus cash that has been created over the past few years," stated Regent.

In terms of sectors the software market led the way with a 41% increase in M&A activity compared to Q2 a year ago and IT services as an area is also remaining attractive, particularly if there is evidence of vertical markets.

The other trend Regent identified was a returning confidence to the venture capital market with investors keener on backing tech companies.

"In a sign that the venture capital and private equity industries are more confident about the market, exits bu these firms totalled 49 in the quarter compared to 37 in Q1 2010," added Regent.

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