TMT Industry M&A Update Q2 2019

Q2 M&A Trends in TMT; How Data and Analytics is Driving M&A Activity

 

TMT spotlight

By 2020, the world is expected to generate 50 times the amount of data compared to 2011. Due to the exponential growth in data generation, the big data and business analytics market is forecasted to grow at a CAGR of 11.9 percent, from $166 billion in 2018 to $260 billion in 2022.

Enterprise software businesses across the globe are looking to integrate analytical capabilities within their technology stacks. Companies including eminent technology players are making consistent efforts to leverage data-driven business intelligence and analytics capabilities to strengthen their customer relations.

With multiple deal announcements between enterprise software companies and data analytics businesses this quarter, consolidation in the analytics sector continues to drive M&A deal activity within the TMT space. These include Salesforce-Tableau, Google-Looker, Sisense-Periscope Data, and Alteryx-Clearstory Data.

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Philip J. Isom

Philip J. Isom

Principal, Global Head of M&A, KPMG Corporate Finance LLC

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KPMG Corporate Finance LLC’s investment bankers have extensive Technology transaction and industry experience, which enables them to understand the industry- specific issues and challenges facing our clients.

Cyrus Lam

Cyrus Lam

Managing Director, KPMG Corporate Finance LLC

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Alexander  Alden

Alexander Alden

Managing Director, KPMG Corporate Finance LLC

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David Creamer

David Creamer

Managing Director, KPMG Corporate Finance LLC

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John Paul Ditty

John Paul Ditty

Managing Director, KPMG Corporate Finance LLC

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Mihir Jobalia

Mihir Jobalia

Managing Director, KPMG Corporate Finance LLC

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Karan Jolly

Karan Jolly

Managing Director, KPMG Corporate Finance LLC

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Roderick Moon

Roderick Moon

Managing Director, KPMG Corporate Finance LLC

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Joseph Radecki

Joseph Radecki

Managing Director, KPMG Corporate Finance LLC

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TMT M&A synopsis

  • Mid-market deal value increases: Mid-market (<$500 million) TMT aggregate deal value was also up year-over-year, with aggregate deal value reaching $30.4 billion in Q2’19, compared to $26.8 billion in Q2’18.
  • Mega deals increase: The quarter recorded 32 big-ticket transactions ($1billion+), a 60 percent jump in the number of deals over Q1’18. The relatively strong M&A performance in the technology sector can be attributed to a number of mega deal announcements that took place in the past three months.
  • Mega deals in mature sectors: This year, mega deals are being driven in relatively mature sectors such as semiconductors and electronic payment processing rather than some of the more growth-oriented segments that saw heavy deal flow in 2018.
  • Mega deals in high growth segments: The lack of large deal announcements in high-growth segments such as SaaS and cloud computing, was snapped in the last three weeks of the quarter with Salesforce and Google announcing landmark deals, followed by Capgemini’s acquisition of engineering research & development (ER&D) services provider, Altran Technologies.

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