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October 1, 2012

Mergers and acquisitions driving UK tech sector

Study suggests that investors are more willing to accept risks in order to acquire good tech assets.

By Tineka Smith

The report reveals that there is an upward trend in M&A activity in tech startup and startup investment with figures doubling from Q1 and making up three quarters of transactions.

"We have now built up 18 months of data on M&A in the UK tech sector and the overall trend looks extremely positive. Our figures from Q1 predicted a busy year, and these statistics would seem to indicate a tentative return of confidence in the recently turbulent M&A markets," said Andrew Hornigold, partner at Pinsent Masons. "It seems to suggest that buyers and their investors, financiers and other stakeholders may be more willing to accept risks to acquire good assets."

Pinsent Masans participated in technology transactions of more than £390m in Q2 2012 due to greater value of deals, increasing M&A transactions, particularly in the E-commerce and IT Software sectors.

Tech transations

"Online retail was the most active sector for transactions," said Jonathan Snade, senior associate at Pinsent Masons. "This isn’t a major surprise as our experience tells us that as the number of consumers with tablets and smartphones rises, e-commerce and m-commerce markets will play an increasingly significant role."

The Q2 2012 says that the Governments focus on tech start ups is also driving investment in the Silicon roundabout as well the global nature of the technology industry is growing with 60% of deals having an international aspect.

"Tech start ups continue to attract investment, driven by the Government’s focus on entrepreneurs, which is combining with the ever increasing availability of support from incubators, accelerators and other networks within the Silicon Roundabout community to foster growth," said Jonathan Snade, senior associate at Pinsent Masons.

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