The value of disclosed global technology deals has risen by 8 per cent to a total of $56.4 billion during the third quarter of 2011, new statistics show.
The value of disclosed global technology deals has risen by 8 per cent to a total of $56.4 billion during the third quarter of 2011, new statistics show.
A quarter-on-quarter technology M&A increase has been evident throughout 2011, rising from $46.2 billion in the first three months of the year to its current state, according to Ernst & Young’s Global Technology M&A Update.
Despite the increase in disclosed deal value, the volume of transactions completed has fallen from 777 in the second quarter of the year to 759 in the three months to the end of September.
The upsurge in money spent on technology M&A during the third quarter of the year can be attributed to businesses worldwide moving towards mobile-social infrastructures in the cloud, says Joe Steger, global technology transaction advisory services leader at Ernst & Young.
Stegar explains: ‘Deal-making to help meet those businesses’ needs is what drove technology M&A up in the third quarter, even though deal-making in other industries declined.’
The findings represent a 22 per cent value performance increase year-on-year, with the most improved statistics coming from private equity.
A rise of 82 per cent sequentially was recorded, with private equity spending $14.6 billion during the third quarter. The result is an 86 per cent increase over the same period last year.
The big-ticket deals during the period between July and September included Google’s $11.9 billion purchase of Motorola Mobility and Hewlett Packard’s $10.2 billion acquisition of UK software company Autonomy.
The report concludes that global technology M&A valuations have become disconnected with other industries during the three months surveyed.
Jeff Liu, group head at US technology lead advisory for M&A at Ernst & Young, adds: ‘Technology valuations will likely moderate unless macro conditions improve. But we’ll continue to see strategically important deals with large premiums from time to time.’
