Corporate dealmakers ready to deal

Contact: Brenon Daly

Companies expect to be busier with M&A during the rest of the year than they’ve been so far in 2009, even though they’re likely to pay steeper prices for their deals. That’s the takeaway from our recent survey of corporate development executives at more than 60 technology firms. The survey, which closed Monday evening, updated our full report from last December and will figure into our midyear M&A webinar on Thursday.

If not bullish, the projections in our midyear survey are much less bearish than they were in our previous survey at the end of last year. Six out of 10 respondents said their companies will pick up their rate of shopping, while just one out of 10 projected their M&A pace will tail off for the rest of 2009. That’s a notable swing back to optimism from the December survey, when just four out of 10 said they expected to be busier, and two out of 10 said they would slow their acquisition pace.

The view from corporate dealmakers is significant because, collectively, they set the tone in the tech M&A market. So far this year, strategic buyers have accounted for $50bn of the $53bn in announced deal values, with financial acquirers tallying just $3bn. In terms of how they assess the buying environment, however, the view is pretty evenly split. Roughly one-third of the respondents said valuations of private technology companies would fall further in the second half of 2009, with another one-third saying they would hold steady, and another one-third predicting they would rebound before the end of the year.