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New Technologies and Strong Pipeline to Fuel an Active Technology Deals Market in 2015, According to PwC USSAN JOSE, Calif., Feb. 24, 2015 /PRNewswire/ -- With 2014 noted for a series of record-setting and transformative deals, momentum is expected to carry over into 2015 as dealmakers continue to invest in cloud, mobile and security, and seek out emerging technologies such as Internet of Things (IoT), according to PwC's US Technology Deals Insights 2014 Year in Review and 2015 Outlook report, released today. "2014 closed with technology deal activity not seen since the dot com era, thanks to a record number of billion dollar transactions and a resurgence of mid-market deals," said Rob Fisher, PwC's U.S. technology deals leader. "As we consider the almost $350 billion in cash and securities on hand at the top 25 technology companies, record levels of private equity funds waiting to be deployed and projected full pipelines from every angle of the market, 2015 promises to be another active and exciting year for technology M&A." According to Deal Insights, cumulative technology deal value for 2014 closed at $161.4 billion, a 62 percent increase over 2013, which had a total deal value of $99.8 billion. Average deal value grew to $583 million, compared to $489 million in 2013. Some of this growth can be attributed a record number of billion-dollar transactions, 36 of which closed in 2014. Total deal volume increased 36 percent, with 277 deals taking place by the end of 2014, compared to 204 in 2013. The fourth quarter of 2014 had both the highest number of deals for the year at 76, and nearly half of the announced deal value for the year at $74.9 billion. Technology IPOs continued to remain a key market driver and reached their highest levels since the dot com era. Even excluding the single largest IPO, valued at nearly $22 billion, IPO value increased 40 percent and volume increased 18 percent over 2013. In total, there were 60 technology IPOs, an increase over the 51 posted in 2013, making 2014 the most active year since 2000. In cross-border deal activity, PwC finds that U.S. companies are the most popular targets as global economic positions improve. Domestic transactions comprised 70 percent of deal volume and 73 percent of deal value in 2014, compared with 62 percent of deal volume and 86 percent of deal value in 2013. In contrast, outbound activity in 2014 declined 7 percent to 42 acquisitions at an average deal size of $378 million. With data analytics becoming a prerequisite, cloud adoption growing and security advancements becoming a more pervasive area of focus, PwC anticipates software deals to continue to lead technology M&A. Software accounted for approximately one-third of M&A deal volume in 2014 and 26 percent of deal value.
PwC's report finds that technology divestiture activity increased by 11 percent in 2014, as companies continued to reevaluate their portfolios and shift their focus to core growth strategies. This increase is contrary to the historic inverse trend where divestures typically increase in years when the deal market has declined. There were a total of 356 divestitures in 2014, representing 21 percent of all technology M&A activity in 2014. Cumulative divestiture deal value for transactions with disclosed values totaled $50.7 billion in 2014, compared with $17.9 billion in 2013, a 183 percent increase due to an increased number of billion-dollar transactions. The top 10 divestitures of 2014 represented 58 percent of this value, a decrease from 81 percent in 2013, due to a three-fold increase in billion-dollar transactions. According to the report, undisclosed value transactions continue to play a significant role, with software leading the way. Technology companies engaged in 1,289 undisclosed deals in 2014, a 10 percent increase from 1,168 in 2013. "New and exciting technologies such as virtual reality, robots and drones that have captured the imagination of investors are making their way into both consumer and enterprise markets," added Fisher. "As new and established players invest in these innovations, large technology firms are expected to continue to rely on M&A to ensure that their portfolio is competitive." The report outlines the following drivers for 2015 technology deals:
PwC's US technology Deals Insights is a quarterly analysis based on data for transactions with a disclosed deal value greater than $15 million, as provided by Thomson Reuters through December 31, 2014 and supplemented by additional independent research. Information related to previous periods is updated periodically based on new data collected by Thomson Reuters for deals closed during previous periods but not reflected in previous data sets. PwC helps corporate and financial sponsors achieve their growth initiatives and optimize deals from strategy through value capture. PwC's Deals professionals support clients on a wide range of transactions including domestic and cross-border acquisitions, alliances, divestitures and spin-offs, capital events such as IPOs and debt offerings, as well as business reorganizations. For more information, visit: www.pwc.com/us/deals About PwC US © 2015 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. Logo - http://photos.prnewswire.com/prnh/20100917/NY66894LOGO To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/new-technologies-and-strong-pipeline-to-fuel-an-active-technology-deals-market-in-2015-according-to-pwc-us-300040030.html SOURCE PwC US |