Are the go-go days for tech M&A go-go-gone?

Contact: Brenon Daly

Twice a year, 451 Research and Morrison & Foerster survey many of the top tech dealmakers to get their views on the M&A market, both on current activity levels and valuation trends, as well as forecasts. (See our full report on our recent M&A Leaders’ Survey.) In this go-round, we decided to extend the outlook with a rather provocative question: will we ever see another boom time in tech M&A?

Specifically, we asked respondents to look ahead for the next half-decade and give us their best guess as to whether tech M&A spending would ever regain the levels of 2006 and 2007, years in which buyers handed over a total M&A consideration of about $450bn. (Yes, almost a half-trillion dollars worth of deals were announced in both those years.) Hitting that level would effectively mean doubling the total amount spent on tech deals around the world in each year since the end of the recession.

The answer? Roughly 40% of respondents said it would probably happen, while 30% said it probably won’t happen. The remaining 30% said it was ’50-50′ whether spending would get back to prerecession boom levels any time before 2018. (Again, for more on this question, as well as the outlook for M&A activity and valuations in 2014, see our full report.)

What is the likelihood that M&A spending will recover to prerecession levels?

Response Percent
Absolutely will not recover 2%
Probably will not recover 27%
50/50 chance will recover 31%
Probably will recover 35%
Absolutely will recover 5%

Source: M&A Leaders’ Survey from 451 Research / Morrison & Foerster

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