M&A activity recuperated from and went beyond pre-pandemic levels in Q1, as business contend to remain ahead of new living and working trends by obtaining required abilities, professional advisory company Ciesco has discovered.
Ciesco, an expert M&A advisory company operating in the tech, digital, media and marketing sectors, said there were 472 deals announced in Q1 2021, a 36 percent increase year-on-year from Q1 2020, currently a strong, pre-covid quarter, when 346 deals were taped, and an even more powerful increase of 80 percent on Q1 2019. Business are rushing to stay ahead of a wave of trends driven by the pandemic, including shifts in working practices and environments, way of lives, facilities, shopping and healthcare.
Ciesco also found that the total divulged worth of deals has increased from $12.4 billion in Q1 2020 to $28.4 billion in Q1 2021– just under the Q1 2019 level of $30.2 billion.
Ciesco noted that wanted assets are scarcer than the capital offered to buy them, driving strong competition on the buy side to go after ‘superior assets and abilities’. It added that the pandemic has actually had little influence on the assessments of healthy organizations and even a favorable impact on those ‘premium’ companies, specifically the ones that traded well through 2020.
Personal equity (PE) firms have actually shown a growing appetite for deal-making throughout tech, digital, media and marketing. Offer volume has actually increased 73 percent in 2020, with 218 deals revealed this previous quarter. The divulged deal worth of these has actually almost doubled, reaching $13.4 billion. PE purchasers represented 46 percent of all deals in Q1, compared to 36 percent in Q1 2020 and 43 percent in Q1 2019. PE buyers are acquiring both platform and bolt-on businesses across a series of sectors.
Strategic buyers are finding themselves playing catch-up, having identified the requirement to invest in brand-new capabilities in order to drive development. There was a 15 percent year-on-year increase in Q1 activity amongst them, with 254 transactions revealed in 2021.
Last year, strategics chose to reinforce their money positions and suffer the uncertainty while remaining watchful to changes that might possibly strengthen their organizations as the pandemic reached its final stages. The competition activity over the past a number of months has actually produced a more attractive selling environment for entrepreneur so inclined.
Among the major PE offers are Avedon Capital’s acquisition of Netzkern and Macaw, which developed a brand-new considerable tech services group and the largest Sitecore gamer in Europe; TripleLift, one of the largest adtech platforms on the planet, announced its sale to Vista Equity Partners for $1.4 billion and the UK-based online customer intelligence and social networks listening platform, Brandwatch, was likewise obtained by Cision (owned by Platinum Equity), for $450 million.
The capabilities most desirable to buyers are, unsurprisingly, technology and data-driven solutions. Ciesco sees activity growing around customer research study and social and analytics tools in specific, in addition to e-commerce services, organization performance solutions, MarTech, AdTech and e-gaming.
Chris Sahota, CEO of Ciesco, said: “M&A activity has not simply recuperated quickly from pre-COVID levels but is surpassing it. The world has altered, and business are racing to acquire the abilities they require to thrive now and in future.”
“This is part of a pattern towards reinvention in 2021 and it is being driven by technology and data. Buyers are gathering around customer and B2B information analytics, social listening tools and e-commerce, among other technological abilities. This is a pattern that will just speed up.
“In general, what Q1 activity shows is a prevalent ambition among businesses in technology, digital, media and marketing to change quickly to the new regular and put themselves in the very best position to grow in the post-COVID period.”
Most of PE investors are reporting that their highest-priority goal in 2021 is to release their capital on brand-new platforms and add-ons to existing platforms. Presently, PE investors are resting on over $1.5 trillion of raised capital globally.
A current study by EY International found that nearly half of surveyed C-suite executives were planning an acquisition in the next 12 months, focusing on worldwide development over domestic. Nearly two-thirds (63 percent) of business also planned to increase investment in tech and digital abilities. Just under two-thirds (57 percent) will increase investment in consumer engagement.
Ciesco reported that in the tech, digital, media and marketing areas, S4 Capital and Accenture were the most active buyers in Q1. Each taped 6 acquisitions. S4 finished 3 acquisitions by means of Mediamonks and three by MightyHive. Accenture obtained companies in digital design, improvement and consulting. To name a few top buyers in the space are Pocket Outdoor Media, a material, experiences and travel company, with four acquisitions and Digital Turbine, Twitter, Clearlake Capital Group and The Carlyle Group with three transactions each.
Digital, MarTech and media were the most active target sectors in Q1 2021, representing 61 percent of all offer activity and the best rise in deal volume, an increase of 55 percent across these sectors. There was a fall in activity in the events sector and the method & creative services sector.
The two biggest markets remain the U.S.A. and the UK, where 196 and 57 deals were struck, respectively, representing 54 percent of overall activity and a year-on-year increase of 12 percent. They were followed by Germany, France, Canada, Sweden and Italy. These countries integrated represent 77 percent of all global offer activity.