Slightly more than half of the respondents (52 per cent) forecast that deal flow will top last year’s level and the majority of respondents (54 per cent) forecast an increase in private equity activity as compared with 2016. The survey follows a relative slowdown in the number of deals during the first quarter of the year, though there was an increase in aggregate value. According to 451 Research’s M&A KnowledgeBase, there were 912 deals with an aggregate value of $77 billion in Q1 of 2017, compared to 1,065 deals with an aggregate value of $74 billion in Q1 2016. However, 2017 comes after two years of the highest tech M&A spending since the Internet bubble burst. Collectively, acquirers in 2015 and 2016 announced deals valued at more than $1 trillion, according to the M&A KnowledgeBase.
Other key findings
Other key findings, takeaways, and analysis from the M&A Leaders’ Survey included that financial Acquirers are key to overall market activity and that cross-Border M&A is to see change. Commenting on the expected change to cross-border M&A highlighted in the survey, Graeme Sloan co-chair of Morrison & Foerster’s Global M7A Practice Group and head of the firm’s London corporate practice, commented: ‘An interesting finding from the survey is the expected change in behaviour by Chinese acquirers in the context of the new Trump administration. With two-thirds of survey respondents predicting that Chinese acquirers will slow their purchases of US tech companies, the corollary is that it is likely to lead to an increase in acquisitions by Chinese companies in countries other than the US in coming years, according to 49 per cent of respondents. European tech companies are obvious targets.’
About the survey
The M&A Leaders Survey is a partnership project between Morrison & Foerster and tech market intelligence firm 451 Research now in its 11th edition and examines significant developments in deal terms, as well as sentiments and trends in key technology markets across the US and the most active countries and regions internationally.
This survey was conducted in April 2017 and had over 150 participants, primarily corporate or M&A executives (44 per cent of respondents) and investment bankers (42 per cent of respondents), with the remaining responses coming from lawyers, VCs, PE professionals, and others in the M&A community. Roughly nine out of 10 responses came from dealmakers and advisers based in the US. Silicon Valley represented the largest single location, accounting for some 40 per cent of the total.