Competition remains high in the information technology (IT) industry as the software sector continues blur the intersections between classical business lines and new technologies. Buyers seek to differentiate what they bring to the table by emphasizing swifter closing times, shorter exclusivity periods and less intrusive shakeups to current operations.
On a global basis, IT mergers and acquisitions (M&A) volume is not quite at the elevated levels observed for much of 2014 through 2016. But unlike many other major industries, the volume of M&A was actually up between Q4 2016 and Q1 2017, if more muted on a year-over-year basis.
Private equity (PE) exit activity increased to kick off 2017. That spike in exit volume was driven in part by a surge in secondary buyouts; as PE buyers’ appetites remain keen for IT businesses, there is plenty of opportunity for fellow PE buyout shops to unload businesses in certain cases.