TMT Finance M&A Forum – May 2018

We were delighted to again sponsor the annual TMT Finance M&A Forum held in London on 22 and 23 May.  TMT Partner, Megan Paul, gave a key note speech on key developments in the Communication sector and our Co-Head of TMT and Corporate Partner, Mark Howard, chaired the Technology M&A Panel. 

The Panel discussion was wide ranging and a full summary is beyond the scope of this note. However, we set out below some of the key points of interest.   

It was noted that ERP and digitalisation process software and solutions have been very active sectors within the market, as has cyber security and data management.  These particular trends align with our own experiences, for example advising IFS on its acquisition of mplsystems and Field Service Management and more recently advising Civica Group on its acquisition of master data management specialists, VisionWare.  Not surprisingly, AI was also discussed as being a major market theme and driver of disruptive strategies within a number of industry vehicles.  Meanwhile, Cloud services including IT Managed Services remains very active, as does Fintech.

The Panel noted that PE is a big driver of M&A activity.  As we noted in our recent TMT Connect newsletter, the number of PE funds in the UK is at an all-time high, meaning the opportunity for founders and management teams to sell and roll-over to create a PE-backed platform company has never been better.  That said, the Panel felt that with multiples reaching x20 in some areas we may be approaching a high water mark and a flight to quality.

In terms of regulation having an impact on deal activity CFIUS was discussed, and Mark Howard mentioned the new UK Government powers for reviewing mergers in key strategic sectors on national security grounds, which came into force on 11 June.  For more information on the new UK regime see our recent article here.

In concluding remarks the Panel’s consensus view was that provided the macro economic and political environment holds, the volume of M&A deal flow should remain robust, subject to a possible pause for breath in Q1 2019 ahead of Brexit.