Tech Deals Put A Smile on UK PLC M&A Sector

According to recent reports from the analyst firm PricewaterhouseCoopers (PwC), UK technology sector has steered deftly in terms of mergers and acquisitions during last year.

The mergers and acquisitions involving UK companies in 2008 had touched a whopping £16billion, registering an impressive 10 percent rise on year-on-year basis, the research firm claimed.

A majority of the hefty deals were struck during the first quarter of the year, while the final quarter observed the lowest levels of takeover deals, since after the dotcom bubble crash in 2002, the research notified.

PwC’s technology sector chief for corporate finance, Andy Morgan upheld the robustness of technology sector by saying, “Although global economic conditions are considered to be the worst for decades, technology companies which survived the turmoil of the dot-com crisis of 2001/02 are far better equipped now to weather the toughest of storms”.

The report attributed the success of technology sector in the current economic situation to the flexible business models it has; however, number of deals in the year 2008 had declined sharply to 162, as against 184 deals penned during the year 2007.

In addition, the report predicted that the UK could turn out to be an increasingly luring offshoring destination for the cross-border firms primarily in the wake of weakening pound.

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Our Comments

Technology mergers and acquisitions during recession periods can only mean that consolidation will end up producing fewer companies and reduce competition. Comparing the last quarter of 2008 with the rest of the year, it was clear that the 2009 is going to be a pretty rough year for tech M&A in general as liquidity dries up and banks are more cautious at lending money.

Related Links

UK companies involved in a third of 2008 tech M&As

(Computer Weekly)

Value of UK tech deals jumps 10 per cent

(Vnunet)

Technology boosts M&A in UK

(Financial Times)

UK stiff upper lip helps sector stay strong

(IT Pro)

UK targeted in tech M&A deals

(CBR)

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