Email: Yulitza Peraza, Brenon Daly
With Friday marking the midpoint of the second quarter, we’d note that tech deal flow is once again picking up substantially. Over the past two years, the April-June quarter has seen more M&A activity than any other single quarter of the year. And this year, just halfway through the period, that trend seems to be accelerating after a historically slow start to 2009.
Since the beginning of April, we’ve tallied $22bn worth of tech transactions – nearly triple the amount of spending from the first three months of the year. (Viewed another way, the M&A spending over just the past six weeks represents 74% of money handed over so far this year in tech deals.) Nine of the 10 largest transactions announced so far in 2009 have come since April 1.
While it’s difficult to predict what the second half of this quarter will bring, we would nonetheless note that the second quarter has traditionally accounted for a disproportionately large chunk of annual spending. In 2007, second-quarter spending represented 44% of the annual total, with last year’s level coming in at 34%. We would attribute the increased activity in the second quarter to the fact that companies typically draw up annual M&A plans and budgets at the beginning of the year, and then go shopping after that. Also this year, we suspect the rebounding equity markets are giving buyers confidence to do deals, as well as planting the thought that perhaps the prices they pay may be headed up from here.
Quarterly spending
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Source: The 451 M&A KnowledgeBase