Tech M&A stumbles out of summer

This summer's momentum in the tech M&A market petered out as autumn arrived. Spending in the just-completed month of October slumped to its second-lowest monthly total of the year. Across the globe, acquirers announced just $17bn worth of tech and telco purchases in October, equaling only slightly more than half the average monthly deal value in the nine previous months, according to 451 Research's M&A KnowledgeBase.

October's spending represents a sharp decline from September and, more broadly, the entire third quarter. (See our full Q3 report.) Spending on tech deals in September, which featured this year's two largest acquisitions, came in more than three times higher than October. The September surge helped boost overall Q3 deal value to a quarterly level more in-line with the boom years of 2015 and 2016. (The two previous years stand out as banner years for tech M&A. At this point in the year, deal makers had spent 85% more in 2015 and 50% more in 2016 than they have so far in 2017.)

However, deal makers abruptly hit the brakes in October, particularly when shopping for big-ticket targets. Our M&A KnowledgeBase records just three transactions last month valued at $1bn or more, down from a monthly average of five 10-digit deals so far in 2017. Without a continuation of those billion-dollar deals, the start of Q4 is tracking much more closely to the first two quarters of this year, rather than the breakout Q3. Overall, with 10 months now in the books, 2017 is on pace for about $340bn in full-year M&A spending, which would represent the lowest annual total in four years.

Recent tech M&A activity, monthly

PeriodDeal volumeDeal value
October 2017254$16.9bn
September 2017260$60.8bn
August 2017314$29.2bn
July 2017248$29.3bn
June 2017282$15.3bn
May 2017316$27.2bn
April 2017277$19.5bn
March 2017299$40.7bn
February 2017277$21.2bn
January 2017363$20.2bn
December 2016272$39.5bn
November 2016285$40bn
October 2016336$83.2bn
September 2016312$30.1bn
August 2016306$31.5bn
July 2016345$94.1bn
June 2016384$67bn
May 2016329$23.8bn
April 2016349$20.7bn
March 2016343$23.9bn
February 2016323$28.3bn
January 2016384$21bn

Source: 451 Research's M&A KnowledgeBase

For more real-time information on tech M&A, follow us on Twitter @451TechMnA.



Brenon Daly

Research Director, Financials

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