by Brenon Daly
At the top end of the market, tech deal flow in the just-completed Q3 resembled a barbell. Blockbuster transactions came thick and fast in both the quarter’s opening month of July and the closing month of September, but were split in August, when seemingly all of the acquirers went on vacation. 451 Research’s M&A KnowledgeBase shows both July and September put up twice as many billion-dollar-plus tech deals as the dog days of August.
Inevitably, the start-stop-start pattern of big prints in Q3 also shaped the overall monthly totals of announced deal value. All M&A tends be fairly lumpy, skewed by occasional large transactions. But the activity in Q3 was particularly episodic. According to the M&A KnowledgeBase, July acquisition spending hit a relatively high level of $51bn, then fell by half to $23bn in August but then rebounded sharply in September, more than tripling to $79bn. September spending represented the highest monthly total in more than two years.
Bookended by big months, Q3 kept alive this year’s streak of consecutive quarterly M&A spending increases. Dealmakers around the globe handed out $154bn on tech and telecom transactions in the July-September period, slightly more than they spent in Q2 and about one-quarter more than they spent in Q1, according to the M&A KnowledgeBase. We would note that the continued increase came even as private equity (PE) firms turned into uncharacteristic clutchfists last quarter, with both the number of PE deals and the spending dropping for the first time in 2018.
Overall, the strength of Q3 puts 2018 on track to rival the highest annual spending level since the dot-com collapse. 451 Research subscribers can see our full report on Q3 M&A activity, as well as a look ahead to the final quarter of the year, on our site on Tuesday.
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