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In 2021, global M&A deal value skyrocketed to an unprecedented USD 5.9 Tn, shattering all previous records. This staggering figure wasn’t just a number—it was a seismic shift in the business landscape, triggered by an unlikely catalyst: a global pandemic. How did we go from worldwide lockdowns to the biggest buying spree in corporate history? And more importantly, where do we go from here?
The story behind this surge is as unexpected as the pandemic itself. As COVID-19 threatened economic stability, Governments and Central Banks, determined to prevent economic freefall, poured money into the markets and kept interest rates at rock-bottom levels. Suddenly, companies found themselves with unprecedented access to funds at minimal cost.
The Tech Services industry rode this wave to new heights. In 2021, deal volumes and valuations in this sector reached levels we’d never seen before. Companies were racing to acquire digital capabilities, often at premium prices.
But as with any wave, the crest eventually broke. By 2023, the landscape had changed dramatically. Central Banks began raising interest rates to combat rising inflation, and the easy money that had fueled the M&A boom started to dry up. The result? A sharp downturn in deal-making activity, with 2023 marking the lowest point in a decade for M&A transactions.
Despite this overall decline, one trend remained constant: the Technology sector’s dominance in M&A activity. Over the past five years, Tech has consistently led in deal volume, outpacing other industries even during the market’s ebb. This resilience underscores the enduring value of Technology in today’s business world.
This rollercoaster ride in the M&A market raises critical questions for Founders and CEOs in the Technology Services space:
Our comprehensive report dives deep into these questions and aims to review the trends observed in the M&A market. It provides a detailed analysis of the factors that have influenced these trends and offers a framework that can guide Technology Services companies in evaluating potential targets. Additionally, the report seeks to assist target companies in understanding the key parameters that matter to potential Buyers and in preparing effectively for the M&A process.
Lastly, the report offers insights into the drivers of growth in the Tech Services sector and identifies major areas of focus for larger companies. It also examines expected trends in the Tech Services market over the next 12-24 months and provides practical advice on how both Buyers and Sellers can best position themselves to capitalize on future opportunities.
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