Contact: Brenon Daly
At least for the opening quarter of 2014, the go-go days are going again. Overall M&A spending in the tech, media and telecom (TMT) market set a record for the first three months of any year since the Internet bubble popped in 2000. Across the globe, the aggregate value of Q1 deals totaled $128bn, according to The 451 M&A KnowledgeBase. That puts 2014 on a run rate to hit an astonishing half-trillion dollars in M&A consideration for the full year.
Spending in the just-completed January-March period came in at roughly three times the level of a typical quarter in the years since the end of the recession. (On its own, the equity value of the proposed Comcast-Time Warner Cable transaction roughly equals the amount spent on all TMT deals in a typical post-recession quarter. But even backing out that mammoth transaction, Q1 spending would still stand as a post-recession quarterly record of $83bn.)
To indicate just how far Q1 stands out from the recent recession, consider this: total M&A spending in just Q1 2014 came in only 10% lower than the full year of 2009. So far this year, we’ve seen such blockbuster prints as the second-largest TMT transaction overall since 2002 (Comcast’s pending acquisition of Time Warner Cable), as well as the biggest price ever paid for a VC-backed startup (WhatsApp’s $19bn exit to Facebook).
While those two deals helped push M&A spending in Q1 to a new high-water mark, we saw solid activity across a number of submarkets that haven’t been busy since before the recession. Large-scale consolidation continued on a steady pace (Comcast-Time Warner Cable, plus several European telco transactions), but underneath that, the midmarket saw an above-average number of deals, with the median value surging to a post-recession record high. (Also, valuations of those midmarket transactions in Q1 basically matched the big-ticket deals, which hasn’t necessarily been the case in recent years.)
And finally, deal flow at the start of this year reflects an unprecedented level of youthful exuberance. Facebook, with its back-to-back purchases of WhatsApp and Oculus VR, obviously stands out. But we would add Google and FireEye to the list of acquirers that did uninhibited, speculative transactions so far in 2014. Look for our full report on Q1 M&A activity and valuations, plus our assessment of the current tech IPO market, in our next 451 Market Insight.
Recent quarterly deal flow
|
Source: The 451 M&A KnowledgeBase
For more real-time information on tech M&A, follow us on Twitter @451TechMnA.