Financial technology, cloud, mobile data and social networking will drive deals and valuation multiples in technology sector


As a new blogger, site statistics are a source of endless fascination.  They are however useful – my post on TMT valuation multiples seems to have been wildly popular, so I thought it worthwhile to trawl through some other reports to see what commentators were predicting.

PwC‘s technology insight presentation caught my eye.  It is a perceptive commentary on M&A trends in the technology sector, not only identifying hot areas, but also the drivers behind those hot-spots.

The first area identified is financial technology, with ongoing regulatory scrutiny and change within the banking vertical driving demand for integrated software and outsourced platforms. They highlight the Misys acquisition of Sophis as an example of this type of deal.

The second area is cloud services and the various activities within that space such as hosting, virtualisation and security. Reinforcing the theme of my last post, PwC sees relatively high valuation multiples for deals in this segment.

The third area is mobile data, which again is something of a recurring theme for this blog. The sub-segments highlighted include applications, gaming and advertising – all of which I agree with based on the recent deals we have seen.

I am less convinced with their last identified area – that of the public sector. As a result of the cuts in the UK, overall revenues are likely to fall so I would see deal activity being primarily defensive and with somewhat depressed valuations as compared to other segments.

Finishing with a personal view on another hot-spots for the year,  one segment that I think will be very hot is social media, with both IPOs for the large players possible, and also mid-market deal activity as the larger players acquire smaller players for capabilities to integrate into their platforms.

About Rob Bratby

Telecommunications, media and technology lawyer advising companies across Europe and Asia
This entry was posted in ASEAN, China, Commercial activity, EU, Gulf, Hardware, India, Mobile, Outsourcing, Services, Software, Technology, UK, US and tagged , , , , , , , , , , , . Bookmark the permalink.

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