IT Sector Survey Trends: M&A Vital to Value Growth

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Executives attending the recent 15th Global IT M&A Forum in San Francisco cite positive 2014 IT merger and acquisitions trends.

Executives attending the recent 15th Global IT M&A Forum in San Francisco revealed in a confidential survey that eighty-five percent (85%) of buyers and sellers of Cloud Services, SaaS, IT Integration and Managed Services believe IT M&A is critical for companies to remain relevant and increase enterprise value.

Survey results also show that based on the current economic climate, 2014 is a good year to complete an M&A transaction. Ninety-three percent (93%) of buyers and sellers attending the Forum believe 2014 is an optimal year to complete a transaction. Further, forty-eight percent (48%) believe this trend will continue for more than the next three years, and twenty-six percent (26%) believe 2014 is only the beginning of an uptick in the number of deals for the next three+ years. As execs feel it is the right time for an M&A transactions, fifty-six percent (56%) predict that transaction values will increase from 2013 to 2014.

In a recent article, “Six Reason 2014 Will be a Strong Year for M&A Activity,” Jeff Golman reinforces survey results by explaining, “there are several indicators that 2014 will shape up to be a stronger year than 2013. First, the wide availability and low cost of debt will support strong valuations. Second, the private equity community will drive M&A through heightened activity on both the buy- and sell-sides. Third, after staying on the sidelines in 2013, owners of high-quality business will likely elect to pursue a sale, given market dynamics.”

During the next three years, eighty-one percent (81%) of buyers and sellers expect the most IT M&A deals will be completed in North America. Survey results reveal sixty-seven percent (67%) believe adding new products and/or services, intellectual property, functional capabilities and/or domain expertise to enhance value as the primary focus for buyers in the IT sector. Additionally, twenty-two percent (22%) of executives believe consolidating to achieve scale and eleven percent (11%) feel entering new geographies and/or expanding footprint in existing geographies are a primary focus for current buyers.

About the Global IT M&A Forum:
The Global IT M&A Forum is an organized and dynamic marketplace for companies seeking middle-market IT mergers and acquisitions. By bringing together pre-qualified buyers and sellers for confidential face-to-face meetings during one business day, this marketplace event facilitates and accelerates M&A transactions with enterprise values less than $20 million.

Tapping a global database of more than 50,000 buyers and investors in the IT sector, the Forum’s ExchangeNet offering works with small and mid-market companies seeking a sale, private equity financial partner, and/or strategic partnerships. Specific focus includes Managed Services, Software and Software as a Service (SaaS), Big Data, IT Security, IT Supply Chain and Business Process Outsourcing (BPO).

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Emma Sherrie
Global IT M&A Forum

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