Inbound merger and acquisition (M&A) investment into UK computer software companies has increased by 70 per cent over a two-year period, according to a report launched by Livingstone, an international mid-market M&A and debt advisory firm.
The report, The Acquirers – A Global Review, includes analysis of data from deals conducted between 2014 and 2016, across the UK, US, Europe, and Asia. The data comprises inbound deals and cross-sector investment across the business services, industrial, media and technology, consumer and pharmaceutical industries.
The findings show that inbound UK acquisitions of companies operating within the software market increased by 70 per cent, with deal volumes increasing from 37 in 2014 to 64 in 2016 alone. The computer services sector also increased by a notable 41 per cent.
Overall, the UK’s media and technology sector grew by a rate of 25 per cent year-on-year in the period, and accounted for nearly a quarter of all inbound M&A deals, up from 20 per cent in 2015. Adding to overall UK M&A growth, the business services sector grew at a rate of nearly 40 per cent, reflecting the ongoing strength of the UK’s service-led economy.
Daniel Domberger, a partner and co-lead of the media and technology team at Livingstone, says: “The tech sector has been tipped as a leading light of British business, and 2016 didn’t disappoint. Our findings show that international acquirers and investors are continuing to eye up the UK’s blossoming tech sector, and its future looks positive, regardless of what happens with Brexit.
“Several high-profile deals in the tech sector made headlines last year, and contributing to the 70 per cent rise was the acquisition of UK’s biggest tech company, ARM, by Japanese group Softbank. The historical significance of the GBP24 billion deal and the unprecedented value highlights that there is still strong appetite amongst overseas buyers to acquire or invest into high-quality UK companies, and the weaker pound is helping make the high valuations of UK tech assets easier for buyers and investors to deliver.
“We have also seen a flurry of disruptive technologies make significant strides forward, including virtual reality, drones and robotics. Tech is becoming the driver for almost all industry sectors, and further investment into the UK’s technology sector will stimulate growth and create jobs.”
