S&P Tech M&A Analysis: Megadeals Buoy Tech M&A Totals, But How Long Can It Last?
Tech M&A is still setting records in 2022, largely due to a spate of megadeals, raising questions about whether the buying spree can continue as interest rates climb and markets turn sharply bearish.
According to S&P Global Market Intelligence’s latest Tech M&A analysis by 451 Research, the pace of deal-making in 2022 is on track to match or exceed 2021’s record pace. For the year through May, 2,272 industry transactions were signed, totaling $386.95 billion. By comparison, 4,321 deals were signed during full year 2021 for an aggregate value of $790.94 billion.
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Q1 2022 hedge fund letters, conferences and more
Michael Mauboussin At The London Quality Growth Conference: How To Be A Better Investor
Michael Mauboussin was the keynote speaker at this year’s London Quality Growth Conference. The Head of Consilient Research on Counterpoint Global at Morgan Stanley Investment Management and adjunct professor of finance at Columbia Business School took part in a “virtual fireside chat” where he discussed some of his strategies for coping with the current macro Read More
Key highlights include:
- Between January and May, acquirers announced eight technology and telecommunications transactions that crested the $10 billion mark. The prior year saw 12 11-figure transactions over the year.
- Record-breaking purchases include Microsoft Corporation (NASDAQ:MSFT)’s $74 billion catapult into gaming development with its acquisition of Activision Blizzard, Inc. (NASDAQ:ATVI), Broadcom Inc (NASDAQ:AVGO)’s expansion of enterprise software with its $61 billion bid for VMware, Inc. (NYSE:VMW) and Elon Musk’s eccentric $44 billion play for social media platform Twitter Inc (NYSE:TWTR).
- March and January 2022 were the top two most-active months of the past decade for technology and telecommunications M&A volume, respectively, even as March recorded about half the aggregate deal value of January.
- Technology and telecommunications acquirers are paying an average of 3.7x enterprise value-to-trailing revenue through May. That is down from the 4.3x average for full year 2021.
The full analysis is available here: Megadeals buoy tech M&A totals, but how long can it last?
Updated on Jun 23, 2022, 1:04 pm