Tech M&A rebounds in Q3, but deal values decline
NEW YORK, UNITED STATES — The third quarter of 2023 saw a slight rebound in tech mergers and acquisitions (M&A) activity after declines earlier in the year, according to CB Insights.
The tech sector recorded 1,765 M&A deals in Q3, a 6% increase from Q2 2023.
Despite more deals being completed, aggregate M&A deal value dropped 10% quarter-over-quarter to $1.1 trillion. This reflects fewer high-value deals getting done amid economic uncertainty.
The number of tech deals worth over $100 million fell in the United States and Europe compared to last quarter.
Big tech companies like Meta, Microsoft, and Google announced no major M&A deals.
Median M&A valuations rebounded to $41 million, after hitting recent lows in Q1 2023.
The data indicates buyers are more cautious about large acquisitions in the current climate. Deal volume has picked up, but high-value transactions above $100 million remain depressed.
Strategic acquirers are especially risk-averse, while financial sponsors also show reluctance to pursue big deals.
Outsourcing firms, particularly those specializing in tech services, may find opportunities in this climate as companies look to optimize operations and reduce costs amid economic uncertainty.
Outsourcing can provide access to specialized skills and technologies more cost-effectively than acquisitions.
