Cloud, big data and social collaboration to drive M&A in UK IT sector
The UK's IT sector will continue to see more acquisitions than the wider market in 2013, as big companies seek to buy in intellectual property
The UK's IT sector will see a high volume of mergers and acquisitions in 2013, accounting firm BDO has predicted, as big companies seek to get their hands on intellectual property relating to cloud computing, big data and social collaboration.
According to BDO's report, On The Hunt For IP – Tech Businesses Go Shopping, mergers and acquisitions in the UK IT sector reached a combined value of $8.2 billion.
"Computer software transactions dominated throughout 2012, with Q2 seeing the highest number of deals in that space since the Lehman’s collapse, said Paul Russell, M&A partner at BDO. "We’ve also seen a real momentum in the IT managed services area."
The firm expects 2013 to see just as high if not higher M&A volume, driven by "cash-rich corporates, increasingly bullish private equity houses and improving liquidity in capital markets", the report said.
Furthermore, the UK will become a more attractive destination for companies to locate their R&D facilities in light of the introduction of the 10% 'patent box' tax in April this year.
“As liquidity gradually improves within the capital markets, and as the UK – with the 10% patent box tax – makes itself ever more attractive in the realm of intellectual property, the UK tech sector looks like it is set for an exciting year'," sad Russell.
BDO said that demand for cloud-related IP will grow as 4G mobile services become more widespread, and that big data will become more widely adopted. It pointed to Microsoft's $1.3 billion acquisition of social collaboration site Yammer as evidence of demand in that space.