Technology

The technology industry continues to innovate and excite moving as it moves at a fast pace. Technology devices and infrastructure are becoming smarter and more connected, supported by emerging technologies such as artificial intelligence (AI) and the Internet of Things (IoT). Digital transformation within businesses and the wider economy is being supported by advancements in IT service provision, notably the adoption of cloud and edge computing technologies.

 

Strong corporate and private equity balance sheets drove the sector’s robust deal activity in 2021, and buyers used tech M&A to keep up with the rapid pace of digitization across industries and to differentiate themselves with tech capabilities. While IT enjoyed high valuations in recent years, higher interest rates may dampen multiples, which are often discounted far into the future. In recent months, high-growth tech shares have started to underperform, with markets pricing in multiple interest rate hikes from the Fed in 2022.

 

After consolidation plays and gigantic M&A deals triggered calls for increased scrutiny on potential monopolies, government agencies across the globe have been more aggressive in their antitrust enforcement in various industries, including tech.

 

* According to Pitchbook’s 2021 Global M&A Report

FCL Industry Coverage

 

  • Advanced Manufacturing
  • AgTech
  • Artificial Intelligence 
  • Cloud
  • Cybersecurity
  • e-Commerce
  • FinTech
  • HealthTech
  • Internet of Things
  • Nanotechnology

M&A Activity

The Technology sector thrived during the first three quarters of 2021, but Q4 exhibited a slight slowdown. Even though Q1 2022 experienced a marginal decrease, Q2 2022 showed a 24% decrease in the total number of deals closed compared to Q1. The activity in Q2 was dominated by Venture Capital investors that represented 74.9% of the transactions.