The number of UK technology M&A deals totalled $280.18 million in September 2019 — this value marked a decrease of 90.4% over the previous month and a drop of 69.9% when compared with the last 12-month average of $929.56 million.
The UK held a 3% share of the global technology industry M&A deal value that totalled $9.4 billion in September 2019.
In terms of deal activity, the UK recorded 41 deals during September 2019, marking an increase of 10.8% over the previous month and a flat growth over the 12-month average.
Commenting on the news, Rory O’Sullivan, managing director at Pagemill Partners, a Division of Duff & Phelps, said:
“The UK technology M&A market continues to be active across the board, although as these data and others show there was some softening over the summer months from what has been a frenetic deal market. We would characterise this as more of a return to a more sustainable pace of deal activity.
“On a more granular level, it is misleading to read too much into one month’s data – which in any event may be understated as the reported $280 million may exclude some of the recently announced deals. In fact, Q4 may be shaping up to be one of the strongest for UK technology M&A deal value following the announcement in October of Thoma Bravo’s acquisition of Sophos for $3.8 billion. This underscores what we are seeing in the market, which is continued strong demand from global private equity firms for well positioned software leaders in the UK across many sectors.”
The importance of AI in mergers and acquisitions
The UK technology industry M&A deals in September 2019: Top deals
The top five technology industry M&A deals accounted for 100% of the overall value during September 2019.
The combined value of the top five technology M&A deals stood at $280.12 million, against the overall value of $280.18 million recorded for the month.
The top five technology industry deals of September 2019 tracked by GlobalData were:
1. Ceres Bidco’s $231.97m acquisition of StatPro Group
2. The $26.15m acquisition of APC Technology Group by Specialist Components
3. Sterlite Technologies’ $14.95m acquisition of Impact Data Solutions (IDS) Group
4. The $6.1m acquisition of Invicta Telecare by Doro
4. TP ICAP’s acquisition of ClearCompress for $0.94m.
Cause for concern? Not really?
Responding to the news, Andy Moseby, corporate partner at Kemp Little, told Information Age:
“Whilst news of any reduction in deal value should make M&A practitioners pause before making any pronouncements about the health of the sector, corporate activity rarely moves on a straight-line basis and a dip in value one month isn’t necessarily a forecast for long-term decline. Whilst deal value shrank in September 2019 from a total of $2.93 billion in August 2019, it marks an increase from July, where aggregate monthly deal value was $0.037 billion. In terms of the number of deals, September saw 41 UK tech transactions complete, which is actually an increase of 10.8% over the number of deals closed in the previous month. Deals can slip from one month to the next for a variety of reasons, and are rarely spaced out evenly throughout any particular year – there are periods of feast and famine rather than a steady diet of deals.”
Paul Wright, head of the technology practice at Odgers Interim, agrees and suggests that “although there are layers of uncertainty around Brexit, the German bell-weather economy flatlining and the tariff war between the US and China, this month’s drop in M&A activity is far from being indicative of homegrown tech M&A activity, which has been exceedingly healthy throughout 2019 – particularly across the middle-market private equity space. We might now be seeing some US companies pausing for thought with the trickle-down effect of tariffs, however it’s more likely to be a blip rather than a long-term trend to be concerned about.”