PwC: Technology deals level off

By Rob Starr, Content Manager, Big4.com

According to PwC’s US technology M&A Insights Q3 2012 report, technology deal value declined in the third quarter and volume remained flat. Smaller IP deals and acquisitions continued while larger technology players remained on the acquisition sideline to focus on their internal operations after substantial consolidation in preceding quarters.

Six deals in excess of $1 billion closed during the third quarter of 2012 with a combined value of $12.3 billion, a 47 percent drop in ‘mega’ deal value from the second quarter.   Software and Internet segments continue to dominate technology M&A activity, accounting for 59 percent of deal volume and 78 percent of deal value in the third quarter, a 61 percent increase of total deal value from the second quarter.

The report highlights an underlying shift away from transactions in both hardware and traditional manufacturing-based technologies.  “As the larger technology companies evaluate their hardware portfolios and pursue potentially higher-margin software and service offerings, a wave of new acquisitions could be on the horizon as these traditional businesses change hands and new acquirers seek greater cost efficiencies,” said Rob Fisher, PwC’s U.S. technology industry transaction services leader.

PwC’s US technology M&A Insights is a quarterly analysis based on data for transactions with a disclosed deal value greater than $15 million, as provided by Thomson Reuters through September 30, 2012, and supplemented by additional independent research.  Information related to previous periods is updated periodically based on new data collected by Thomson Reuters for deals closed during previous periods but not reflected in previous data sets.