The UK technology, media and telecoms sector has recorded its highest level of foreign investment since the dotcom boom, according to Freshfields.
The UK technology, media and telecoms sector has recorded its highest level of foreign investment since the dotcom boom, according to Freshfields.
Between January and August, foreign acquirers committed £12.6 billion in 132 deals, more than three times than was spent on the sector last year and significantly higher than any year between 2001 and 2005.
The increase is attributed to low valuations. Many of the largest investments in the sector this year have been in publishing companies, where a total of nine deals worth £9.9 billion have already taken place, including Thomson Corp’s £7.9 billion bid for Reuters and the $1.4 billion (£890 million) acquisition of Emap’s publishing business by Heinrich Bauer.
As advertising revenues move from print media to online, depressed valuations of publishing businesses with visible revenues and cash flows are creating buying opportunities.
The boom in foreign investment contrasts sharply with the restrained buying patterns of UK companies for overseas assets, which have shrunk to £628 million from a peak of £159 billion in 2000.
A combination of illiquid credit markets and an expectation of further declines in valuations means that even cash-rich UK companies are hesitant to make deals.
Among private equity buyers it is widely expected that those with deep TMT industry sector expertise across Europe are best placed to identify bargains in the current climate.
