M&A trends in technology services Q1 2024

2024 brings new challenges and exciting opportunities in the M&A landscape for both buyers and sellers. Despite the economic downturn in 2023, deal completion exceeded expectations and the first quarter of 2024 will be strong, even in the face of continued economic concerns and global tensions. This surge in M&A activity across sectors, with deal values ​​reaching $798 billion compared to $580 billion in Q1 2023, is driven by emerging trends that signal a significant rebound.

The technology services sector has emerged at the forefront of a resurgence in global M&A activity, with deal values ​​rising significantly to $125 billion in the first quarter of 2024 compared to $92 billion in the first quarter of 2023. Positive sentiment around tech deals suggests bright prospects for the rest of 2024.

The positive sentiment in the technology services sector is driven by several key factors that have collectively created a wave of cautious optimism in the broader M&A context. The stabilization of inflation and interest rates, combined with the availability of sufficient capital waiting to be mobilized, has re-instilled confidence among dealmakers. Moreover, companies recognize the operational imperatives of portfolio restructuring to ensure digital agility and resilience, which is further driving M&A activity.

It is worth noting that policymakers are increasingly confident that the current interest rate cycle has reached its peak and that systemically important central banks in the US and Europe will ease monetary policy in the near future. This belief paved the way for pent-up demand from buyers and a growing pool of seller assets, setting the stage for a transformative year in M&A.

Driven by strong market performance in 2024, technology companies are actively seeking to increase operational efficiency, increase market share, and gain AI/ML and Hyperscaler expertise while expanding their digital transformation efforts. To achieve these goals, they actively seek out promising private companies and private equity portfolio assets that can fuel their inorganic growth journey.

The technology services sector has shown remarkable resilience, recording the highest number of high-value deals as investors take advantage of emerging M&A trends. Early indicators suggest a return to mega-deals and cross-border deals in the broader market. This trend is expected to continue in the coming months and extend to all sectors, including technology services.

Moreover, retailers are strategically calibrating their approach, prioritizing profitability in the face of margin pressure. This shift underscores the importance of aligning M&A strategies with operational goals and underscores the need for a comprehensive understanding of the market dynamics shaping the technology services sector.

As the M&A landscape evolves, “Technology Services M&A Quarterly Report for Q1 2024.” provides a valuable source of information and trends that enable leaders to make informed strategic decisions in the exciting M&A landscape in 2024.

What you will find in the report:

• IT services: Key market changes in the first quarter of 2024
• Short-term risks to capital markets and dealmaking in 2024
• Select Technology Services Marquee Deals in Q1 2024
• IT services – comparable transactions, long-term price performance, long-term valuation multiples and transaction activity

See the report