Quarterly volume is also on the rise with 1,039 deals, an increase of 4% sequentially and 2% YOY. So far this year, the global technology sector has seen 2,041 deals, 2% ahead of 2015's post-dotcom-record pace.
Jeff Liu, EY Global Technology Industry Leader, Transaction Advisory Services, says:
"Near-record value and volume levels in the second quarter show that technology M&A continues to be the most important tool of choice to help corporate strategy keep pace with unprecedented disruption emerging as a result of rapidly advancing digital technologies."
M&A records set by private equity (PE) firms, non-tech and Chinese buyers
Despite a larger number of big-ticket transformation deals, corporate tech buyers announced only one megadeal (above US$10b) in Q2 2016, compared with three in Q2 2015. This led to a YOY decline in corporate tech's disclosed value. However, PE and non-tech buyers made up for the falloff, with Chinese buyers playing a major role.
- PE: US$25.7b in disclosed-value technology deals by PE buyers made Q2 2016 the highest-value PE quarter on record. With 95 deals, it is the second-highest-volume PE quarter, falling just short of Q3 2010 (99 deals).
- Non-tech: The aggregate value of deals from companies outside of the sector buying technology companies jumped 95% YOY to US$21.3b. Volume from non-tech buyers also increased, by 28% to 159 deals. As a result, 2016 is now ahead of 2015's non-tech-buyer pace in both value and volume.
- China: Chinese buyers recorded their highest-value technology quarter ever with US$32.3b in disclosed-value deals. It brought their year to date (YTD) total to US$47.4b, which is already 19% ahead of their entire 2015 value of US$39.9b.
Digital disruption provides a boost to ongoing technology M&A strength
Accelerating growth of the Internet of Things (IoT) and big data analytics was a major factor shaping Q2 2016 technology M&A. The number of deals driven by these disruptive digital technologies increased at a faster pace than all others for both Q2 2016 and YTD, well above the single-digit pace of overall global volume increases. IoT volume rose 28% YOY for Q2 2016 and 26% YTD; big data analytics volume rose 13% for the quarter and 29% YTD.
Liu says, "Digital technology is becoming like electricity, water and oxygen for companies in every sector; they can't survive without it. Expect global technology M&A to match or surpass last year's record pace by the end of the third quarter."
To view a full copy of the EY Global technology M&A report — April-June final look, visit: http://ey.com/GL/en/Industries/Technology/ey-global-technology-mergers-and-acquisitions.
Notes to Editors
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.
About EY's Global Technology Sector
EY's Global Technology Sector is a global network of more than 21,000 technology practice professionals from across our member firms, all sharing deep technical and industry knowledge. Our high-performing teams are diverse, inclusive and borderless. Our experience helps clients grow, manage, protect and, when necessary, transform their businesses. We provide assurance, advisory, transaction and tax guidance through a network of experienced and innovative advisors to help clients manage business risk, transform performance and improve operationally. Visit us at ey.com/technology.
About the EY Global technology M&A update: April-June 2016
The April-June 2016 issue is based on EY's analysis of The 451 Group M&A KnowledgeBase data. Deal activity and valuations may fluctuate slightly based on the date the database is accessed. The full report is available at http://ey.com/GL/en/Industries/Technology/ey-global-technology-mergers-and-acquisitions.
EY Global Media Relations
+1 212 360 9261
Logo - http://photos.prnewswire.com/prnh/20160620/381362LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/digital-transformations-drive-a-blockbuster-second-quarter-for-global-technology-ma-300315276.html