Global deal activity in 2022 stood at USD 3,609 Bn and saw a ~38% decline over 2021’s value of USD 5,857 Bn. Q4 2022 stood at USD 797 Bn, a staggering decline of ~45% over Q4 2021’s value of USD 1,453 Bn. The technology sector, however, performed better than the overall market and showed resilience. The deal value for the year stood at USD 720 Bn (~37% decline over last year’s USD 1,149 Bn), contributing ~20% to the overall M&A market. The deal volume declined by ~18% and stood at 11,275 in 2022 vs 13,768 in 2021.
While the overall M&A market was impacted globally, the M&A in the IT / ITeS sector was primarily impacted by a correction in the broader technology space starting in March 2022. This was due to the confluence of several factors such as rising inflation, continuous hiking of interest rates, and geopolitical concerns with a war that impacted Eastern Europe and other neighboring countries which are the key technology centers.
Also, the lower number of mega-deals in Q3 and Q4 of 2022 led to deal values plummeting more than the deal volume impacting the average deal size. The fact of the matter is that the key areas that saw intense M&A activity in the last year were Cybersecurity, Digital Transformation and Engineering, ERP, and Product Engineering.
Zinnov’s M&A quarterly report continues to play an important role in bringing out valuable numbers, insights, and identifying trends in the space, and providing leaders a concrete base to make decisions off of.
In this quarterly report, Zinnov’s M&A Advisory team explores critical data points and M&A trends across the Technology & Services industry, shedding light on – M&A activity and trends, marquee transactions in IT/ ITeS space in 4Q22, valuation trends, key M&A themes and drivers, near-term risks (including increasing interest rates and a looming recession), and the overall transaction activity in 4Q22.