September-quarter technology merger and acquisition transactions were up “an astonishing” 31% year-on-year, reaching almost 1400 deals in Q3 this year, according to US tech M&A advisor Corum Group.
Corum said on its latest webcast investor demand for tech platform deals and bolt-on deals had been “incredibly robust this year”.
“With PE firms sitting on trillions in cash that needs to be deployed it wasn’t surprising to see PE platform deals surge 65% compared with Q3 2022, rising to 130,” the firm said.
“The number of VC-backed exits rose by 25% as investors took advantage of favourable valuations to cash out.”
Corum said “non-tech acquirers” were now major players in tech M&A.
“In the third quarter these companies scooped up 111 tech firms, a 54% yoy increase that represented 8% of all tech M&A transactions,” it said.
International deal-making also remained strong with 35% of tech M&A transactions involving cross-border deals.
Corum said Q3 mega-deals occurred in all heavyweight tech sectors.
Vertical sectors continued to lead in volume, while horizontals maintained the lead in terms of value.
The latter had seen the largest mega-deal of 2023 so far – Cisco’s $28 billion splurge on Splunk “to strengthen its software business and capitalise on the boom in AI”.
Corum VP corporate strategies, Tim Goddard said “lesser-known buyer types”, including holding companies, sub-funds, search funds, family offices, non-tech buyers and global buyers, were active in the market.
The former included Canada’s Constellation Software, “the most prolific buyer of software companies in the world”, which has been an active buyer of mining software and technology firms over the past five years.
The niche mining tech market has also seen significant non-tech buyer activity in that time, led by original equipment manufacturers and even mining company VCs.
“Non-tech buyers can be challenging to engage with because, unlike [other buyers], their primary purpose is not acquiring tech companies,” Goddard said.
“But synergies can yield substantial benefits.
“At Corum [we say] every company is a technology company, some of them just don’t know it yet.
“And some of them are better at it than others.”