Tech M&A crashes

The European technology sector has seen the value of acquisitions fall to US$45bn in 2007 compared to the US$86bn record in the previous quarter.

There were 787 acquisitions involving European technology companies in Q1 2008, a decline of just 2% from the 799 deals announced in the final quarter of 2007. However the combined value of these acquisitions dropped sharply to US$45bn from US$86bn the previous year.

These are the findings of the latest report by Regent Associates, an IT investment bank, which argues that the dramatic decrease shows that whilst concerns over the economy and the shortage of credit has had little impact on smaller deals, it has had an effect on the larger ones, those valued at over US$100m. The report predicts that deal flow will remain steady for the rest of the year with a chance of a decline as the year closes.

“All of the media talk about recession and the shortage of credit is having little effect on M+A activity in Europe. The fact is that there is a substantial amount of cash in the hands of the trade and private equity organisations that is looking for a home. All the time end-user expenditure on technology holds up, the industry will be bold enough to maintain acquisition flow,” says Peter Rowell, chairman of Regent

Private company made up 46% of the number of buyers of tech companies in Q1 2008, with private equity maintaining a 14% share of deals.