For M&A investors, 2021 was a year to remember! In 2021, the aggregate deal value crossed USD 5.8 Tn, with 63,000+ transactions – easily surpassing the previous high of USD 4.6 Tn recorded in 2007. While the mega-deals (> USD 5 Bn) jumped to 181 (vs 111 in 2020), the mid-market (USD 1-5 Bn) deal activity also saw a triple-digit increase in 2020. Also, 2021 was a record year with each of the quarters recording deal activity of USD 1 Tn+. Of this, Private Equity firms accounted for ~20% of the total M&A activity, with deals worth ~USD 1.2 Tn – 111% increase over the previous year, and a new record. SPAC (Special Purpose Acquisition Company) listings also had a record year with ~3x listings compared to 2020.
The surge in M&A activity was led by the Technology sector, which accounted for one-fifth (~USD 1.15 Tn) of the total global transaction value. While the Technology sector M&A activity showed resilience even during the pandemic-affected 2020, the increased demand for technology and digital assets continued in 2021 – witnessing a surge of 71% in 2021 vs 2020. While 2021 levels would be difficult to surpass in 2022, we believe that the Technology sector is expected to have a supercharged 2022, backed by the sectoral tailwinds and favorable market conditions.
The global Technology & Services sector has seen a rerating in the year 2021, with benchmark outperformance across geographies. The demand for digital assets has jumped across both the public and private markets, reflected in record-high valuations. In this quarterly update, Zinnov’s M&A Advisory team explores key data points and M&A trends across the Technology & Services industry.
The report sheds light on:
• M&A activity and trends in 2021 and marquee IT Services transactions in Q4-2021
• Valuation trends, key M&A themes, sectoral tailwinds, and near-term risks
• Zinnov Insights on Private Equity and M&A; Talent Strategy and Globalization
• IT Services Transaction Activity