Tech M&A megadeals saw uptick in final quarter of 2015, EY says

The fourth quarter of 2015 concluded a year of multiple global technology dealmaking records, setting a new all-time high for annual tech M&A aggregate value, thereby surpassing the previously set record in 2000, according to research conducted by EY.

In a report published on Thursday, EY said the fourth quarter of 2015 ended a blockbuster year with a “megahit” quarter, as the valuation of disclosed deals grew by 323% compared to the same period in 2014.

EY expects the forces behind the last quarter’s deal value to continue in 2016 as massive digital transformation caused by disruptive cloud, mobile, social and big data analytics technologies is still in its infancy.

“Consequently, many tech vendors will continue addressing the growing need for high-performance cloud data centres to handle the data storage and processing load those digital transformation trends require. This will lead some companies to continue seeking scale and end-to-end solutions, while others will still privately manage their own transformation away from public-market scrutiny,” the global advisory firm noted.

Olivier Wolf, head of EY's technology transaction advisory services team, said, “Global technology M&A values and volumes will remain high but moderate in 2016. As digital technology transforms other industries, more complex ecosystems are evolving to deliver complete solutions. A powerful new partnering form we call ‘industrial mash-ups’ will increasingly stand in for M&A in such situations.”