The number of mergers and acquisitions among UK information technology and services companies rose by 25% during the first six months of 1992. According to a survey conducted by Broadview Associates, the total number of deals during the period was 71 and the total value of transactions grew by 13% to UKP403m. Broadview says that the first six months saw a broadly-based increase in activity. It is the first time since 1989 that the number of transactions has risen so sharply, and the report concludes that many would-be buyers that had postponed their external development plans are now returning to the market to make strategic acquisitions at what may well turn out to be bargain prices. The growth in total transaction value was due primarily to a greater number of mid-size deals of between UKP5m and UKP20m. These represented 23% of all deals completed during the six months, an increase from last year’s figure of 19% The largest transaction during the period was the merger between Covia, Apollo and Galileo, valued at UKP173m. This was followed by Meggitt’s acquisition of the Micrelec Group for UKP19m, Cray Electronics’ purchase of Autofile for UKP17m and Symantec’s acquisition of its UK distributor for UKP16m. These four transactions accounted for 56% of the total. The bulk of acquisitions, 42%, were of application software firms, followed by professional services with 24% and processing-network services firms at 11%. Broadview says product-based companies have been less affected by the recession than services companies, and this is reflected in the the greater level of activity in that segment of the market.
