Despite expected drop in M&A activity, some sectors remain strong in Q1
Despite expectations of a steep drop in M&A activity in the technology, digital, media, and marketing spaces, these sectors remained ‘healthy’ in Q1 – offering a positive outlook amid global uncertainty, the specialist advisory firm Ciesco has said.
Against a backdrop of supply chain issues linked to Covid and China’s shutdown, an economic downturn, and nervousness connected to the collapse of Silicon Valley Bank and the continuing Russia-Ukraine war, there were 493 transactions across tech, digital, media, and marketing – a year-on-year fall of just three percent.
There was strong activity across the digital services, adtech/martech, digital media and content and production sectors. The PR and communications and events and experiential sectors also saw a rise in activity.
Specialist M&A advisory firm Ciesco, which tracked the transactions, said that the USA and the UK were the most active M&A markets in Q1 of 2023, representing 49% of all global deals. They were followed by France, Canada, Australia, Netherlands and Germany, all of which combined represented 70% of total deal volume.
The firm’s Global M&A Review Q1 Update showed it was also a busy quarter for M&A in the APAC region, which saw the greatest year-on-year increase in deal-making. M&A activity climbed 62% from the same period in 2022, with Australia leading the market by 25%.
Chris Sahota, Founder and CEO of Ciesco, said that given the surrounding uncertainty, M&A activity in the tech, digital, media, and marketing sectors had been ‘healthy’. He added that, despite challenges, he expected M&A activity to remain constant over the rest of the year.
Chris commented: “We’re grappling with a great deal of global uncertainty,’ he said. ‘But market expectations were overly pessimistic. These results should be seen as a major positive.
“The sudden collapse of Silicon Valley Bank will have made some tech investors cautious, but we’ve seen a very healthy appetite for M&A in the first three months of the year.
“The overall value of the deals disclosed has increased by 14%, and in the $12.5 billion acquisition of Qualtrics by Silver Lake and CPP Investments, we’re also seen our first so-called mega-deal of 2023.
“The kind of resilience and adaptability that became a hallmark of successful organisations during the pandemic is proving to be key to business success in our specialist sectors. It’ll be a real focus for businesses this year. Private equity, with its substantial dry-powder funding, continues to be an aggressor in terms of activity across the sector.”