Mergers and acquisition activity on the up next year


Mergers and acquisition activity on the up next year

Simon Quicke

Mergers and acquisition activity in the tech sector should increase next year as confidence and value floods back into the market.

According to findings from Deloitte optimism is returning to the market with private equity and auctions expected to pick up pace next year.

Those firms that operate in the cloud arena are going to be able to command a premium and thanks to the government's policy of opening up contracts to a wider number of players could increase the attraction of those smaller firms that are innovative.

Firms working in virtualisation technologies, mobile applications, security software and diagnostics software will be getting some of the higher valuations.

"Valuations are expected to increase in the next 12 months as auctions become more competitive. The favoured sectors that will attract a premium are those that support and embrace cloud based solutions," said Conor Cahill, technology corporate finance partner at Deloitte

When it comes to identifying buyers the expectation is that most will come from overseas with the US, India and China the most likely sources of suitors for UK tech firms.

However things remain more cautious on the IPO front with few technology bosses viewing next year as the right moment to float.

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