Global Tech M&A Overview
With record valuations being announced by tech buyers in H1’ 21, tech M&A has witnessed a significant rebound with global deal values reaching $262.3bn in Q2’ 21 from a decade low level of $36.0bn in Q2’ 20.
Paving way for reinvention and new tech spend
Tech companies have faced significant disruption driven by social, cultural and climate events in 2020 resulting in drastic make over of the business and operations landscape.
- Global acquirers spent $262bn on tech transactions in Q2’ 21 with 63 deals valued at over $1bn
- Non-SPAC acquirers have done deals at a record high average valuation of 6.1x EV/Rev, up by 2.2x since Q1’ 21
- With pandemic imposed practices becoming the new norm, IT processes have transformed, leading to the need for more investment in information security, public cloud and productivity technologies
Looking Ahead to Next Quarter: New Deal Announced
Mediaocean to Buy Adtech Company Flashtalking for $500 Million
Mediaocean, which is majority-owned by Vista Equity Partners, has acquired Flashtalking as it sets its sights on an IPO offering next year. The acquisition is Mediaocean’s 11th, and is part of a recent boom in the adtech sector, reflecting a surge in digital ad spending and changing habits by consumers who are spending more time online shopping, reading and entertaining themselves.
Digital Media M&A in Q2’ 21
Q2’ 21 recorded a total of 442 deals, a 19% decline from Q1’ 21 with a total of 549 deals. The overall deal value for Q2’ 21 was $135.3bn, a 93% increase on a Q-o-Q basis. The deal value in mega deals (>$1bn) also increased by 134% from $52.7bn in Q1’ 21 to $123.5bn in Q2’ 21, with 62% of the overall mega-deals value from U.S. targets. The deal count in mega deals increased by 24% from 17 deals in Q1’ 21 to 21 deals in Q2’ 21. The digital media M&A market in Q2’ 21 was mostly driven by activity in the digital media technologies and eCommerce segments. The U.S. dominated the global digital media M&A market both in terms of deal count (49%) and deal value (90%).
Digital Media M&A Market Snapshot
Sponsor Backed M&A Activity
Of the 549 digital media deals announced in Q1’ 21, 82 involved one or more financial sponsors, of which 37 are U.S. based targets. Financial sponsors contributed $16.5bn in disclosed deal spending in Q1’ 21.
Domestic M&A and Cross-Border Deals
US and UK dominated the digital media M&A landscape, constituting more than 60% of total deal volume. The number of cross border transactions increased by 44.2% from 147 in Q4’ 20 to 212 in Q1’ 21.
Digital media deal valuations increased in Q1’ 21 with an average EV/Rev. multiple of 5.4x, compared to 4.3x in Q4’ 20. Average EV/Rev. for last 6 months is 4.9x.
549 transactions in Q1’ 21
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Note: All data is represented on the basis of disclosed deal values for transactions as available in the sources.
Sources: Capital IQ, 451 Research, Mergermarket and other publicly available information, IndustryArc