Q1 M&A in tech, digital and media bucks expectations with healthy diagnosis despite major global uncertainty, says Ciesco.
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 3%.
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.
“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,” he added. “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.”
- Despite widespread uncertainty, supply chain issues, surging inflation and the Russia-Ukraine conflict, global M&A deal activity in tech, digital, media and marketing fell just 3% on the same period in 2022 in Q1
- Strong activity was seen across the digital services, adtech/martech and content & production sub-sectors, which accounted for 61% of deal activity in the focus sector.
- The PR & communications and events & experiential sub-sectors saw a rise in activity over Q1 2022, up 117% and 30% respectively.
- The USA, UK and Western Europe were the most active M&A markets; M&A activity climbed 62% year-on-year in the APAC region.
- PE and PE-backed firms continue to be a strong buyer category. Private Equity buyers made 40% of all acquisitions, as they did in Q1 2022, whilst Strategic Acquirers held their proportion of 60%.
- Ciesco CEO Chris Sahota underscored the importance of resilience and adaptability for business success in 2023
Find out more about Ciesco.
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