27 Mar 2018

Tech M&A Outlook 2020: Fierce pace of tech disruption will continue to force companies to innovate via M&A

The fierce pace of technology disruption is forcing companies to innovate via M&A to avoid being left behind. Hampleton Partners highlights increased private equity activity against a cyclical downward trend in deal volumes and value.  

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In its latest report, Hampleton Partners’ Tech M&A Outlook 2020, the international mergers and acquisitions advisor, outlines how traditional companies remain under pressure to quickly and effectively integrate new technologies such as blockchain, artificial intelligence (AI), machine learning, IoT, big data and the cloud into their product and service offerings to avoid being rendered obsolete by new market entrants that are causing profound shifts in value chains and customer behaviours.
Download the full report here: https://hampletonpartners.com/hampleton-tech-outlook-2020-report 
This is resulting in rising strategic deal valuations for disruptive, young and scalable tech companies, with increasing activity from private equity and their portfolio companies compared to strategic investors. This, despite an overall cyclical downward trend in transaction volume and total disclosed value from 4.043 and $506 billion in 2016 to 3.441 and $325 billion in 2017.
Private equity firms – with more cash at their disposal than ever before – and their portfolio companies, completed a total of 882 deals, more than a quarter (26 per cent) of all tech 2017 M&A deal transactions. And such firms are becoming increasingly present in mega deals, such as the acquisition of Scandinavia's largest payments processor, Nets A/S, for $5.3 billion by consortium led by U.S. buyout firm Hellman & Friedman LLC at a 30 per cent share premium and 24x earnings.
Miro Parizek, founder and principal partner, Hampleton Partners, said: “Despite the slowdown in the second half of last year, the overall outlook in the foreseeable future is very positive as continued technological disruption forces established vendors and new market entrants to innovate and stay competitive via tech M&A.”
“We are in the midst of a longer lasting up cycle and expect a rebound in deal volumes this year. The technological and resulting behavioural and social change is forcing established companies in industries such as financial services, automotive, healthcare and high-tech industrials to acquire and integrate companies at the leading-edge of artificial intelligence, blockchain, cybersecurity and many other technologies to ensure they can stay relevant and launch new products and services into the marketplace quickly. The alternative, is simply to be left behind.”
Download Hampleton Partners’ Tech M&A Outlook 2020 Market Report for the outlook on eight sectors: automotive technology; digital marketing; e-commerce; enterprise software; fintech; healthtech; high-tech industrials and Industry 4.0 and IT services.


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