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Q3’23 Tech M&A Highlights


The number of technology company deals continues to decline. Overall, players continue to show restraint compared to previous years and remain firmly cautious regarding risk. However, some investors with available capital are showing a little more willingness to make significant acquisitions, as evidenced by the increase in deals of more than US$100 million.





Valuation


Despite growing 1.5 times QoQ, valuations fell back to 0.7 times in the last quarter. This follows the trend seen in the fourth quarter of 2022 and the first quarter of the year, with valuation increases of less than 1x compared to the valuation of the last round.


Europe stands out


M&A activity in Europe continues to outpace the United States in terms of deal volume. The region is also closing in on the US as a leader in M&A deals worth more than $100 million, with large-scale deals in Europe rising to 33, compared with 18 in the previous quarter.


Big techs disappear


In the third quarter, big technology companies did not carry out any M&A. In addition to the predominantly cautious mindset, technology giants, which are typically active in acquisitions, are constrained by a more challenging regulatory landscape, especially in the United States and Europe.


$1B+ Deals Defy Trends


Billion-dollar transactions are up 50% from the first quarter of 2023. While still below the 2021 peak, the number of M&A targets valued at over $1B has risen to 21 in the third quarter, compared to 14 in the first quarter. Overall, after previous declines, the valuation (median) for M&A targets continued to recover in the third quarter, reaching US$41 million.

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