Contact: Brenon Daly
This summer’s momentum in the tech M&A market petered out as autumn arrived. Spending in the just-completed month of October slumped to its second-lowest monthly total of the year. Across the globe, acquirers announced just $17bn worth of tech and telco purchases in October, equaling only slightly more than half the average monthly deal value in the nine previous months, according to 451 Research’s M&A KnowledgeBase.
October’s spending represents a sharp decline from September and, more broadly, the entire third quarter. (See our full Q3 report.) Spending on tech deals in September, which featured this year’s two largest acquisitions, came in more than three times higher than October. The September surge helped boost overall Q3 deal value to a quarterly level more in-line with the boom years of 2015 and 2016. (The two previous years stand out as banner years for tech M&A. At this point in the year, deal makers had spent 85% more in 2015 and 50% more in 2016 than they have so far in 2017.)
However, deal makers abruptly hit the brakes in October, particularly when shopping for big-ticket targets. Our M&A KnowledgeBase records just three transactions last month valued at $1bn or more, down from a monthly average of five 10-digit deals so far in 2017. Without a continuation of those billion-dollar deals, the start of Q4 is tracking much more closely to the first two quarters of this year, rather than the breakout Q3. Overall, with 10 months now in the books, 2017 is on pace for about $340bn in full-year M&A spending, which would represent the lowest annual total in four years.