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.”
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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.”