Information Technology (IT) Industry

Q3 2022: Mergers and Acquisitions Trend Report

Industry Overview

• The overall global outlook for the Information Technology (IT) Industry is highly optimistic. The pandemic catapulted new technology adoption among many organizations while rapidly accelerating a worldwide digital transformation.
• The rapid acceptance of remote work, cloud computing, everything-as-a-service models, supply chain disruptions, and sustainability efforts has created an intense demand for new technological solutions and workflow optimization efforts. With many of the pandemic issues slowing, technology leaders have the opportunity to address continuing challenges more deliberately and purposefully.

Key Industry Trends

• The number of enterprises operating in the industry has expanded.
• Despite significant M&A activity, overall market share concentration in this industry remains low.
• As more business operations are conducted online, demand for industry services will likely remain high.
• With technology valuations plummeting in 2022, more favorable equity prices and sustainable growth is possible once inflationary concerns abate.

Recent M&A Transactions

Historical Performance

• Over the past six years, shifting technological trends toward cloud computing, analytics, and cybersecurity have caused larger operators to acquire smaller companies and develop new products to maintain competitive positions.
• Revenues have been consistently expanding, except for a COVID-19 induced drop in 2020. The industry returned to hyper-growth in 2021, but it has slowed down as inflationary worries, cybersecurity concerns, and anti-trust lawsuits continue to mount against industry players.

Future Industry Growth

• Jumpstarted by the pandemic’s abrupt, worldwide push towards a digital-first lifestyle, 2022 and beyond is expected to show increased revenues as technology innovates, expands, and reaches new use cases.