Technology companies aren’t buying up other companies with as much vigor as they once did, but things may change in the second half of the year, according to a new report out today from PricewaterhouseCoopers.
“Technology companies face the constant conundrum of a need to balance key investment initiatives while navigating fears of future downturns amid signs of positive economic growth,” said Rob Fisher, PwC’s U.S. technology industry deals leader. “While the number of closed technology transactions declined in the second quarter, new deal announcements point to robust M&A activity for the rest of 2013 as technology businesses plot their next wave of transactions.”
In the second quarter, PwC tracked 32 completed transactions, down from 41 in the first quarter. Average deal value increased to $433 million from first quarter’s average of $253 million.
The software sector took a big hit, with deal volume falling 62 percent with just eight deals completed. Deal values dropped 73 percent to $1.5 billion.
IPOs, meanwhile, are on the mend. PwC tracked 15 IPOs during the second quarter, more than double that of the first quarter.
More from the report:
“After technology deal volume reached a four-year low in the first quarter of 2013, the second quarter proved equally disappointing as volumes dipped again sharply and value recovered only slightly. Yet the fundamental drivers of technology M&A remain strong. With piles of unused corporate cash, increased momentum among private equity buyers, technology companies determined to fully embrace cloud and capture an increased share of mobile consumers, and executives eager to identify new avenues to fuel growth engines, technology deals may be down, but certainly not out.”
