INDUSTRY SPOTLIGHT
M&A TRENDS
Mega trends in the industry are prompting interest from dealmakers while activity remains flat in other sectors. By Vawn Himmelsbach
While mergers and acquisitions may have slowed down across industries, in the tech sec- tor it's just part of doing business. Thanks to a highly competitive, fast-paced, ever-changing industry, combined with disruptive technology, intellectual property and pat- ents, M&A is always an option for Canadian tech firms. But an uncertain economy, as well as an increasing divergence between buyers and sellers over valuation, is a concern for deal- makers. Deals are still happening, though — perhaps just a little differently than a few years ago. Tech M&A got off to a mixed start this year, according to Ernst & Young's Global technology M&A update. Aggregate deal value of global tech M&A fell 12 per cent year-over-year to
US$25.1 billion in the first quarter of this year, which was only half the value decline of M&A in all industries. "The volume of transactions is up slightly from the prior year, yet deal value is down rather significantly," says Tony
Ianni, president of Ernst & Young Orenda Corporate Finance. But tech-sector M&A is faring much better than M&A in general; private equity deal values for technology climbed 171 per cent year-over-year in the first quarter, despite falling significantly in all industries. Ernst & Young expects that macroeconomic pressures will
hold global tech M&A activity to flat or slow growth in 2012, but disruptive "mega-trends" will drive more strategic transac- tions. These megatrends include smart mobility, software as a
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TECHNOLOGY BUCKS
