2015 Tech M&A on a path to continue record-setting spending of 2014

Technology mergers and acquisition spending in 2015 are likely to continue at the record pace set last year, according to a new report from 451 Research. Bullish sentiment from corporate acquirers and bankers, combined with a good macro-economic environment and a re-energized private equity market, is a key factor behind the healthy M&A outlook, according to 451 Research’s Technology M&A Outlook Report, released today. Meeting or exceeding 2014 levels of M&A spending would be a high bar, given that acquirers spent $439bn in 2014 – the highest level since 2000, and twice as much as tech acquirers had spent in an average year on M&A since the credit crisis a half-decade ago. 451 Research is an information technology research and advisory company with a core focus on technology innovation, market disruption and tracking the M&A activity that is critical to emerging markets.

“2015 appears likely to continue the deal-making momentum we experienced in 2014, which was the highest level of tech M&A spending since the Dot Com collapse,” said Brenon Daly, Research Director at 451 Research for M&A. “Tech investment bankers have told us that their pipelines are fuller than they've been in years, while corporate development executives indicated they expect to be even busier shopping this year,” continued Daly.

According to 451 Research, more than half of corporate acquirers (58%) indicated that they expected their own company to pick up the pace of deal making in 2015. That was the highest forecast by strategic buyers in the tech M&A marketplace in a half-decade. Likewise, tech investment bankers are bullish for this year, with M&A pipelines fuller than they've been in years. More than three-quarters (77%) of investment banking survey respondents indicated that the aggregate value of tech transactions they are currently working on is higher than it was a year ago. That stood as the second-highest assessment in the past half-dozen years of the 451 Research Survey.

The 2015 M&A Outlook Report provides analysis of the M&A drivers in key enterprise technology segments. Sectors likely to see significant action in 2015 include:

Information Security: Consolidation is inevitable as vendors expand their existing portfolios to meet intensifying customer demands.
Mobility: The need for end-to-end enterprise mobility solutions that can provide bottom-line results and add analytics will drive healthy M&A activity.
Cloud computing: Cloud infrastructure acquirers will look in part to acquisitions to add new high-value offerings on top of their raw compute offerings.

In addition to the above-mentioned sectors, the report outlines M&A drivers in Enterprise Software, Networking, Storage & Systems, Hosting & Managed Services, Datacenter Technology and AdTech.

The report identifies specific acquirers and targets likely to be involved in deals in 2015, and names at least 20 companies that 451 Research thinks are of a size and mind to go public in 2015.

The data in the M&A Outlook is based on 451 Research’s M&A KnowledgeBase, a database focused solely on information technology and telecommunications mergers and acquisitions.