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Alternative Market Briefing

Technology deals value down 12.8% at $226.3bn YoY basis, with 1425 deals in 2020

Friday, December 18, 2020

Laxman Pai, Opalesque Asia:

2020 technology deals value was down by 12.8% at $226.3 billion on a YoY basis in the United States. The total deal volume also nose-dived by 13.5% compared with 2019 figures, to 1425. However, the average deal size has shown an improvement of 0.8% to $158.8 million.

According to PwC insights, deal value started in 2020 with the lowest it has been since 2016, as companies reduced or eliminated many forms of spending in response to the pandemic. After a few months of adjusting to the crisis, low-interest rates - coupled with a potential vaccine in sight - improved M&A activity dramatically in the second half of the year.

Deals include 14 mega deals (for a total value of $192 billion), compared to just four mega deals (totaling $33 billion) in the first half of 2020. But deal volume stayed low compared to prior years, it said.

While the pandemic has hurt the broader economy, the technology sector has been less impacted, as consumers and businesses have looked for technology solutions to support new ways of working and living.

As a result, tech deal-makers appear to have increasing levels of optimism, which could lead to record-breaking activity in 2021.

"COVID-19 has acted as a catalyst for trends we expected to see later in the future," the report said. As a result, many companies are shifting to remote work for the longer term and need to pivot to SaaS-based offerings. That's making tech companies attractive M&A t......................

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