Technology M&As experience biggest rise in over a decade

Tech M&A has seen the steepest rise in activity in over a decade

Technology mergers and acquisitions (M&A) activity has seen the biggest quarterly increase in over 10 years during the third quarter of 2009, according to a report from corporate finance firm Icon.

The rise of 20 per cent in developed markets, which has seen the sale of businesses such as Skype and digital agency Razorfish, is due to low interest rates and regained confidence in the investment community, says the report.

According to the study, deal valuations in the technology sector were up nearly 30 per cent over the period, helped by mega deals valued at over $1bn (£ 610m), and more businesses are planning initial public offerings (IPOs) for 2010, which should bring a further boost to the market.

While there have not been as many M&A deals in the UK as in the US, some high profile deals were announced during the last quarter, such as the acquisition of Tiscali UK by Talk Talk and the disposal of Friends Reunited by ITV.

The public sector has also seen increased activity, with deals such as Capita’s sale of its IBS Opensystems Revenue and Benefits unit to Civica for £ 10m and System C Healthcare’s acquisition of social care software provider Liquidlogic.

Other noteworthy transactions in the UK include the sale of virtualisation systems firm VirtualizeIT to US buyers, as well as other smaller deals closed by call handling systems firm Netcall and mobile payments business Monitise.

According to the report, “confidence is continuing to rebuild” and the sector recovery is being led by large deals from giants such as Oracle, Dell, EMC, Adobe, IBM and Amazon, all of whom have made significant acquisitions recently.