Private equity deals driving tech sector M&A activity, says Merrill Corporation survey

Dealmakers in the technology sector believe that the influx of capital from private equity has contributed to recent M&A activity, boosting volumes and valuations, according to a recent survey conducted by Merrill Corporation.

The survey was conducted as part of the company’s ongoing webinar series on M&A across various segments, and included industry experts plus over 650 dealmakers.
 
A strong majority of respondents (74 per cent) believe that private equity’s increased technology M&A presence has increased both deal volumes and valuations.
 
Nearly half of the survey respondents (45 per cent) indicated that excess liquidity in global markets will have the greatest impact on technology sector M&A activity over the next year; the next biggest influences would be the repatriation of offshore earnings (20 per cent), and the potential for tax reform (19 per cent).
 
More than half of the respondents (55 per cent) indicated that they expect a modest increase in technology sector M&A activity over the next two quarters.
 
Predictions of the privatisation of public technology companies were mixed: 37 per cent of survey participants indicated that they expect the number of publicly traded technology companies being taken private to increase slightly in 2018; 32 per cent believe that take-private activity in the technology sector in 2018 will remain on par with 2017 levels.
 
“The survey results reflect a broader marketplace view, and trend, that the pace of innovation and disruption will continue to be a powerful driver behind M & A activity in the technology sector, with private equity continuing to have a very active, and increasingly impactful presence,” says Rusty Wiley, Merrill’s President and CEO. “It seems clear from the survey results, and the trends that we’ve observed at Merrill, that M&A activity in the technology sector will continue to be fairly robust.”