Welcome!

@ThingsExpo Authors: Xenia von Wedel, Liz McMillan, Jason Bloomberg, Yeshim Deniz, Elizabeth White

News Feed Item

Second Quarter Technology M&A Thrives amid Improving Macroeconomic Conditions with Announced Deals Signalling a Strong Second Half of 2014, says PwC US

Software and Internet Deals Thrive while Hardware and Semiconductor Sectors Drive Increasing Deal Values

SAN JOSE, Calif., Aug. 6, 2014 /PRNewswire/ -- Extending the positive momentum from the second half of 2013, equity markets set new highs, IPO markets reached activity levels not seen in years, VC investments harkened back to 2000 levels, and economic outlooks remained modestly optimistic across sectors, according to PwC's U.S. Q2 technology deals insights report, released today. Private equity (PE) continued to play an active role in technology, though challenged by strategic buyers who are able to leverage healthy valuations and substantial amounts of cash on hand.

PwC logo

In the second quarter of 2014, PwC found that the number of technology transactions rose, increasing 87 percent over the second quarter of last year. The second quarter ended with 62 transactions completed, mirroring that of the first quarter and continuing the momentum of 2013's second-half surge. With the 62 transactions totalling $26.7 billion, average deal value totalled $430 million, a slight increase from $406 million in the first quarter, and down from $510 million average over the last 12 months. A total of four transactions in excess of $1 billion closed.

Transaction volume remained active with the software and Internet sectors leading the way in terms of deal volume, but the hardware and semiconductors sectors drove transaction value in the second quarter with some large deal closures. In comparison to the second quarter of 2013, one of the worst in recent years, transaction activity grew substantially with volume up 72 percent and value nearly doubling at 87 percent. There were four deals in excess of $1 billion during the second quarter, slightly down compared to an average of six per quarter over the last 12 months.

"After a strong start during the first quarter of 2014, the second quarter followed suit with an increase in the number of technology deal announcements. While the number of new billion-dollar deals announced remained in line with the first quarter, the volume of smaller and middle market transactions notably grew," said Rob Fisher, PwC's U.S. technology industry deals leader.  "This upward trend in IPO markets combined with the tremendous pent-up cash balances of the leading technology players bodes well in driving the momentum of technology M&A through the remainder of the year."

Technology IPOs accelerated pace, adding 22 new pricings with proceeds exceeding $5.1 billion. New publicly announced IPO registrations continued, totalling 20 for the quarter and a number of additional registrations filed confidentially under the rules of the U.S. JOBS Act.

While overall second quarter deal volume aligned with the first quarter, with volume relatively flat and value increasing 4 percent. The software sector continued to stay strong and saw an increase in the number of closed deals.

  • The software sector remains at the forefront of deal activity but has traditionally been comprised of smaller deals. At 20 transactions closed with an aggregate deal value of $4.1 billion, volume grew 18 percent while value declined 44 percent over the first quarter. Compared to the second quarter last year, deal volume increased 150% and value increased 163%.
  • Despite the recent trends in hybrid business models adjoining software and internet companies, second quarter internet deal activity reflected more transactions focused on traditional e-commerce deals with 15 transactions closed.
  • IT services volume remained flat with nine deals closed and values that grew 10 percent, resulting in an increase in average deal value from $278 million to $305 million.
  • With volume down 8 percent and value up 60 percent, the average deal value for the hardware sector increased to $866 million from $496 million in the first quarter with 11 closed transactions.
  • In the semiconductor sector, volume increased 40 percent, while average deal size quadrupled. While exhibiting some volatility between quarters, consolidation continues to remain the topic of conversation for semiconductor companies.

With the proliferation of Internet-connected and wearable devices, PwC sees the 'Internet of things' continuing to evolve, with these trends driving the demand for specialized semiconductor components and software to enhance them. Additionally, cloud, mobile and social are other focal areas driving new forms of innovation and are prime targets for technology players across various sectors.

"We anticipate that the upswing in broader IT spending will encourage top technology companies to start positioning themselves to capture future value by planning for inorganic growth.  We expect those actions to further boost the outlook for technology deals," added PwC's Fisher.

PwC's US technology Deals Insights is a quarterly analysis based on data for transactions with a disclosed deal value greater than $15 million, as provided by Thomson Reuters through June 30, 2014 and supplemented by additional independent research.  Information related to previous periods is updated periodically based on new data collected by Thomson Reuters for deals closed during previous periods but not reflected in previous data sets.

PwC's Deals practitioners help corporate and private equity executives navigate transactions to increase value and returns. In today's increasingly daunting economic and regulatory environment, our experienced M&A specialists assist clients on a range of transactions from smaller and mid-sized deals to the most complex transactions, including domestic and cross-border acquisitions, divestitures and spin-offs, capital events such as IPOs and debt offerings, and bankruptcies and other business reorganizations. We help clients with strategic planning around their growth and investment agendas and advise on business-wide risks and value drivers in their transactions for more empowered negotiations, decision-making and execution.  We help clients expedite their deals, reduce their risks, capture and deliver value to their stakeholders and quickly return to business as usual.  

Our local and global deal strength is derived from over 1,400 deal professionals in 21 cities in the U.S. and over 9,800 deal professionals across a global network of firms in 75 countries.  In addition, our network firm PwC Corporate Finance provides investment banking services within the U.S.  

For more information about M&A and related services in the technology industry, please visit www.pwc.com/us/deals or www.pwc.com/technology.

About PwC US
PwC US helps organizations and individuals create the value they're looking for. We're a member of the PwC network of firms in 157 countries with more than 184,000 people. We're committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/US. Gain customized access to our insights by downloading our thought leadership app: PwC's 365™ Advancing business thinking every day

Learn more about PwC by following us online: @PwC_LLP, YouTube, LinkedIn, Facebook and Google +.

© 2014 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC US refers to the US member firm, and PwC may refer to either the PwC network of firms or the US member firm. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

Logo - http://photos.prnewswire.com/prnh/20100917/NY66894LOGO

SOURCE PwC US

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
BnkToTheFuture.com is the largest online investment platform for investing in FinTech, Bitcoin and Blockchain companies. We believe the future of finance looks very different from the past and we aim to invest and provide trading opportunities for qualifying investors that want to build a portfolio in the sector in compliance with international financial regulations.
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
Imagine if you will, a retail floor so densely packed with sensors that they can pick up the movements of insects scurrying across a store aisle. Or a component of a piece of factory equipment so well-instrumented that its digital twin provides resolution down to the micrometer.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...
Product connectivity goes hand and hand these days with increased use of personal data. New IoT devices are becoming more personalized than ever before. In his session at 22nd Cloud Expo | DXWorld Expo, Nicolas Fierro, CEO of MIMIR Blockchain Solutions, will discuss how in order to protect your data and privacy, IoT applications need to embrace Blockchain technology for a new level of product security never before seen - or needed.
Leading companies, from the Global Fortune 500 to the smallest companies, are adopting hybrid cloud as the path to business advantage. Hybrid cloud depends on cloud services and on-premises infrastructure working in unison. Successful implementations require new levels of data mobility, enabled by an automated and seamless flow across on-premises and cloud resources. In his general session at 21st Cloud Expo, Greg Tevis, an IBM Storage Software Technical Strategist and Customer Solution Architec...
Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, discussed some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he covered some of the best practices for structured team migration an...
No hype cycles or predictions of a gazillion things here. IoT is here. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, an Associate Partner of Analytics, IoT & Cybersecurity at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He also discussed the evaluation of communication standards and IoT messaging protocols, data...
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
"IBM is really all in on blockchain. We take a look at sort of the history of blockchain ledger technologies. It started out with bitcoin, Ethereum, and IBM evaluated these particular blockchain technologies and found they were anonymous and permissionless and that many companies were looking for permissioned blockchain," stated René Bostic, Technical VP of the IBM Cloud Unit in North America, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventi...
When shopping for a new data processing platform for IoT solutions, many development teams want to be able to test-drive options before making a choice. Yet when evaluating an IoT solution, it’s simply not feasible to do so at scale with physical devices. Building a sensor simulator is the next best choice; however, generating a realistic simulation at very high TPS with ease of configurability is a formidable challenge. When dealing with multiple application or transport protocols, you would be...
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
We are given a desktop platform with Java 8 or Java 9 installed and seek to find a way to deploy high-performance Java applications that use Java 3D and/or Jogl without having to run an installer. We are subject to the constraint that the applications be signed and deployed so that they can be run in a trusted environment (i.e., outside of the sandbox). Further, we seek to do this in a way that does not depend on bundling a JRE with our applications, as this makes downloads and installations rat...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
DX World EXPO, LLC, a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lead...
Digital Transformation (DX) is not a "one-size-fits all" strategy. Each organization needs to develop its own unique, long-term DX plan. It must do so by realizing that we now live in a data-driven age, and that technologies such as Cloud Computing, Big Data, the IoT, Cognitive Computing, and Blockchain are only tools. In her general session at 21st Cloud Expo, Rebecca Wanta explained how the strategy must focus on DX and include a commitment from top management to create great IT jobs, monitor ...
"Cloud Academy is an enterprise training platform for the cloud, specifically public clouds. We offer guided learning experiences on AWS, Azure, Google Cloud and all the surrounding methodologies and technologies that you need to know and your teams need to know in order to leverage the full benefits of the cloud," explained Alex Brower, VP of Marketing at Cloud Academy, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clar...
The IoT Will Grow: In what might be the most obvious prediction of the decade, the IoT will continue to expand next year, with more and more devices coming online every single day. What isn’t so obvious about this prediction: where that growth will occur. The retail, healthcare, and industrial/supply chain industries will likely see the greatest growth. Forrester Research has predicted the IoT will become “the backbone” of customer value as it continues to grow. It is no surprise that retail is ...