By Rob Starr, Content Manager, Big4.com
According to PwC’s US technology M&A Insights Q3 2012 report, once bolstered by a series of mega-deals in excess of $10 billion, technology deal value declined in the third quarter and volume remained flat.
According to PwC, private equity continues to be an active player in the technology market with more than three deals in excess of $1 billion announced during the quarter. Furthermore, technology companies continue to seek alternative investments through joint ventures and smaller stakes to access key technologies.
In the third quarter of 2012, PwC found that technology sector transaction volume was essentially flat with 59 deals closed compared to 58 deals closed in the previous quarter. While cumulative quarterly deal values have been at or exceeded $25 billion each quarter during the past two years, the total deal value for the third quarter in 2012 dropped to $20.5 billion, the result of fewer large acquisitions. A year ago, deal activity in the third quarter of 2011 totalled 78 transactions with a cumulative deal value of $26.6 billion.
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.