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Technology Acquisitions at all time high
Regent Associates launches its 2006 M&A activity review 8th February 2007, The level of technology acquisitions, has done the unthinkable and beaten all previously recorded levels and reached an all time high, according to the latest findings from Regent Associates' 'European Technology Acquisition Review' (ETAR). Analysis of 2006 revealed a total of 3,295 transactions, an increase of eight per cent over the 3,053 deals completed in 2005. However, the growth trend of the last few years appears to have reached a plateau with deal flow on average just above 800 deals a quarter. Despite this constant, the combined value of all deals in 2006 was up 24 per cent to $337 billion compared to $272 billion a year earlier, indicating that deal flow for 2007 should remain at healthy levels. It is evident that the current activity is being fuelled by the confident performance of the industry as a whole and the abundance of buyers, both trade and financial, with high levels of available cash. The 'ETAR', published by Regent Associates, is a quarterly tracker of M&A activity across ten European technology industries and provides the only up-to-date indicator on deal flow across European sectors. Peter Rowell, chairman, Regent Associates said, '2006 was a very active acquisition market for technology companies. Just as in 2005, the current activity is built on solid foundations with carefully thought out strategic and financial metrics. There are very few surprises, either in terms of the strategic intent or the valuation.' 2006 Review Highlights
High activity levels but still no bubble - Despite the record number of deals in 2006 the combined value is still somewhat short of the $764bn seen in 2000. Price to earnings multiples of 18.7 are high, but not a cause for concern Super deals back on the table - 2006 saw seven key deals with values in excess of $10 billion, compared to just two in 2005. In 2000 there were 13 such deals Market 'ripe' for successful exits - Of the 3,295 transactions, 898 were divestments of subsidiaries or divisions of larger companies. This represents 27 per cent of all deals, the lowest percentage level since 2000. Private equity exits totalled 247 in the year, the highest ever, and up from 202 exits in 2005 Cash buyers win on stock market - Analysis of the acquisition's funding indicates that many public companies consider their stock undervalued, which has caused cash to become ever more popular 2006 Sector Highlights
Content & Media - Once again, the content and media sector has maintained its strong growth with 934 transactions in 2006 compared to 766 a year earlier and just 220 three years ago in 2003. This remarkable activity lead to this sector overtaking IT services as the most active Software - The software sector, which has been tipped by many as the focus of most consolidation, saw 26% growth in acquisition activity over the year. Application Software continues to be most active part of the market with buyers again seeking differentiated offerings in both enterprise software and vertical market applications IT Services - Growth in the number of consulting and resourcing companies reinforced the general feeling of confidence with this market2006 Country Highlights
UK - The UK retains its position as the most active buying region. The UK is closely followed by Scandinavia and North America. However, whilst Scandinavia's trend decreased slightly, North American buyers increased their activity by 19% Western Europe - Both Germany and France have generated increased activity over the last few years as their economies have shown strong recovery. Year on year, the biggest jump in buying activity came from Spain and Portugal Eastern Europe - Eastern European companies sustained recent activity levels, a trend driven by substantial restructuring of the telecoms industry Ro
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