Tech M&A Activity Down Overall; Middle Market Transactions Lead Way in Q1

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By Michael Greene

May 21 — Despite a dip in overall deal value, technology M&A activity in Q1 2015 generally continued the pace seen during the past several years with middle market transactions leading the way, according to a May 21 PricewaterhouseCoopers report.

“The first quarter maintained the momentum seen over the past several years, albeit a decline from the peaks witnessed at the end of 2014. With a clear return toward the middle market, deal volumes were prominent but megadeals were scarce, resulting in a noticeable decline in total value,” PwC's “U.S. Technology Deal Insights Q1” concluded.

During the first quarter, there were 73 technology deals completed with a value of $22.3 billion, including 58 U.S. deals worth $18.7 billion. Accordingly, “average deal value totalled $305 million, a 27% decrease from $415 million in the first quarter last year.”

Five deals in excess of $1 billion closed during the quarter, including Publicis Groupe's $3.5 billion acquisition of Sapient Corp. Among the deals in excess of a billion dollars announced but not yet closed in the first quarter were: Hewlett-Packard Co.'s $3 billion acquisition of Aruba Networks Inc. and Bain Capital LLC's $2.4 billion acquisition of Blue Coat Systems Inc.

“The mixed results of the first quarter were in part due to a residual effect from the flurry of activity over the past few quarters and from the companies who are realigning their near-term goals with competitive shifts in the marketplace,” according to PwC.

Middle Market and Software Deals 

Although average deal size declined in Q1 from the record-setting 2014, middle market and software transactions have been driving deal volume in the technology sector, the report found.

“The software sector remained the most active, at 26 transactions closed with an aggregate deal value of $3.5 billion,” according to PwC.

And these trends don't appear to changing anytime soon.

“Middle market deals—always the mainstay of technology volumes—are expected to continue, but likely at the smaller end of the spectrum as high-valuation private rounds provide an attractive alternative to M&A exits,” PwC predicts.

In a press release accompanying the report, Rob Fisher, PwC’s U.S. technology deals leader, said “the top technology companies maintain tremendous war chests of cash in excess of $370 billion providing ample ammunition for strategic acquisitions for the remainder of 2015.”

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To contact the editor responsible for this story: Ryan Tuck at

The report is available at