Tech M&A stuck in low gear

Contact: Brenon Daly

Tech dealmakers continued to stay on the sidelines in the just-completed Q2 as worries about the slowing US economy and a financial collapse in parts of Europe had them rethinking their acquisitions. Spending on deals across the globe in the April-June period plummeted to $43bn, a 40% slide from the same quarter in 2011. Further, the number of transactions slid 9% year-over-year to 878 – the lowest quarterly total in a year and a half.

On a year-over-year basis, tech M&A spending declined in every month of Q2. Viewed more broadly, that means that buyers have spent less money on deals in five of the six months so far in 2012 compared with 2011. The waning activity has left the total value of acquisitions announced in the first half of 2012 at its lowest level in three years. Somewhat ominously, the spending rate so far in 2012 puts the full-year level at almost exactly the same level as the recession-wracked year of 2009.

2012 monthly activity

Month Deal volume Deal value % change in spending vs. same month, 2011
January 340 $4.1bn Down 65%
February 266 $10.4bn Up 16%
March 282 $16.8bn Down 30%
April 277 $14.1bn Down 47%
May 310 $15.6bn Down 47%
June 291 $13.3bn Down 20%

Source: The 451 M&A KnowledgeBase

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