The number of technology mergers and acquisitions (M&A) in Canada nearly doubled from 15 deals in the fourth quarter of 2010 to 27 in 2011, according to Ernst & Young‘s Global technology M&A update and 2011 review. Megatrends including smart mobility, cloud computing, social networking, “big data” analytics and cross-sector and cross-industry blur drove this increase in technology M&A around the world.
“Disruptive megatrends continued to fuel M&A in the technology sector last quarter — especially in Canada,” says Tony Ianni, leader of corporate finance in Ernst & Young’s Transaction Advisory Services practice. “Deal-making in the Americas represented just over half of all 2011 global technology M&A volume alone.”
Trends that have been developing for several quarters — or even years, in some cases — yielded a long string of multibillion-dollar deals last year. Thirty-four deals topped US$1 billion in 2011, including eight in the fourth quarter. Established companies made major consolidation plays and placed big bets on smart mobility (including internet and mobile video), cloud computing and business intelligence/analytics.
At the same time, a multitude of smaller deals demonstrated the strategic importance of certain technologies, especially social networking and security, but also healthcare information technology, online and mobile games, and advertising/marketing technologies.
“Looking ahead, 2012 could be a slow-growth year for global technology M&A, given the return of macroeconomic volatility,” says Ianni. “We’ve already seen signs that even global tech M&A isn’t immune to the effects of broader uncertainty. While the total global value of tech M&A surged 41% in 2011, fourth-quarter deal volume was the lowest quarterly total since the second quarter of 2010.”