The Resurgent High-Tech Marketplace: 2017 M&A Report (Boston Consulting Group)

Summary

• Deals in tech, including digital, totaled more than $700 billion in value in 2016, representing almost 30% of the entire M&A market.§1
• Aggregate tech deal values have increased 27% per year since 2012, from $278 billion to $717 billion.§2
• More than 80% of the volume of tech M&A is made up of transactions valued at $100 million or less.§2
• Nontech-sector acquirers have grown by 9 percentage points since 2012 to about 70% of all tech transactions.§3
• Median EV/sales multiples for tech targets rose from 2.1 to almost 3.0 from 2013 to 2016, about a 50% increase.§5

Key insights

1. Tech M&A value plunged from more than $900 billion to less than $300 billion in 2001 after the dot-com peak.§1
2. The total number of tech deals has been growing at a rate of 9% per year since 2012.§2
3. SoftBank Group's acquisition of ARM Holdings ($31.6 billion) and Microsoft's purchase of LinkedIn ($26.2 billion) made up 8% of the total market.§2
4. Almost one-third of all private equity and venture capital deals in 2016 involved tech targets.§3
5. Apollo Global Management acquired Rackspace for $4.3 billion in 2016.§3
6. Advanced manufacturing accounted for more than 600 transactions in 2016, growing at almost 20% per year for the past three years.§4
7. Siemens's acquisition of Mentor Graphics was valued at $4.5 billion.§4
8. Gaming and fintech deals had the highest median valuation multiples from 2013 through 2016, exceeding 3.0 times sales.§5