More than four-fifths of technology-focused private equity firms will make an acquisition in the sector this year, according to research.

More than four-fifths (84 per cent) of technology-focused private equity firms will make an acquisition in the sector this year, according to research.

A survey of 40 firms finds that 72 per cent expect an overall increase in investments in the sector. Trade sales are still felt to be the most likely exit route, with 90 per cent of respondents taking this view, while US companies are seen as probable acquirers for British businesses.

Wendy Hart, corporate finance advisory partner at professional services firm Grant Thornton, which conducted the research, says, ‘The sterling/dollar exchange rate and the relative speed with which the US appears to be coming out of recession suggests that there will be continued appetite from the US for UK acquisitions.’

Cloud computing and software as a service are identified as the hottest subsectors by the survey’s respondents. Both are seen as the beneficiaries of corporate cost-cutting.

The average size of IT investments has dropped, with 86 per cent of private equity transactions having a deal value of between £5 million and £100 million, compared to 67 per cent in 2007.