mandadeals.co.uk


TECHNOLOGY M&A


‘While the US has seen an upturn in technology businesses listing – with 18 in the first two quarters of 2011 – the AIM market has seen just two’


Table 3: Quarterly cross-border tech deals – volume and value Deal quarterly value (announced date) 2011 Annualised Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q3 2009 Q2 2009 Q1 2009 Q4 2008 Q3 2008 Q2 2008 Q1 2008


No. of deals


62 11 10 16 13 5


10 5 7 9


10 7 9


Table 4: M&A deal volume across UK sectors Sector


2009 on 2008


Mining 58% Manufacturing Construction Automotive


Hotels and restaurants Telecommunications


21% -5% 16% 99% 40%


Computer and related activities 35%


it done yourself – that is the way to achieve rapid growth.’


The deal for Nokia’s Operator Branded Messaging business is part of a move to embrace the emerging economies, with users moving from basic products to new technologies and missing out the intermediate stages.


The transaction works as a buy-and- build deal for Synchronica. ‘It accelerates the market entry while driving product development and competitive positioning,’ Brinkshulte adds.


Synchronica’s deal with Nokia came after a successful fundraising of £9.4 million, giving the business the ammunition it needed to grow in a sector


No. of deals with known values 30 8 8 6 6 3 3 5 5 7 5 4 6


Aggregate known value (£m) 1,416 436 106 53 53 19 90 87


567 74


215 11


269 Source: Zephyr and Bureau van Dijk


2010 on 2009 1%


-18% -50% -29% -55% -5% 10%


2011 on 2010 67% -4% 7%


-48% 2%


12% 27%


Source: Zephyr and Bureau van Dijk


that has shown yearly growth on a consistent basis against a backdrop of underperforming ones (see Table 4).


IPO UNDERPERFORMANCE For tech companies looking to raise funds to accelerate growth, the IPO route is one that has continued to underperform in the UK, even for the buoyant tech market. While the US has seen an upturn in technology businesses listing – with 18 in the first two quarters of 2011 – the AIM market, once the playground of choice for global tech companies, has seen just two. However, the re-emergence of private equity investment in the market has not been missed by the technology sector.


Tinglobal was recently the subject of a £6 million MBO backed by NVM Private Equity, with Andy Vickers, ex-managing director of Canon UK and Ireland, moving to Tinglobal to become business development director.


The MBO of the refurbished IT hardware business demonstrates the extent to which the green initiative has been adopted in the corporate space. Chairman David Gutteridge explains, ‘As we deal in refurbishments we have caught a bit of the green agenda wave, because the bigger corporates need to have their corporate responsibility and environmental agenda, and phrases to put in reports and marketing material.’


For technology businesses looking to grow, Gutteridge feels that private equity is a sensible option, with the benefits being more than just an injection of finance: ‘The benefit that we get from private equity that we would never get with a bank (which would only really give you a quarterly meeting with your account director) is a genuine interest in the business strategy and how it is developing.’ Tinglobal, which primarily sells refurbished mid to high-end servers, is now aiming to expand upon its existing retail operations to incorporate a service element, a move that Gutteridge believes will be possible with the addition of Vickers. Looking at prospects for the coming year, Ernst & Young’s Pearson says he believes there is enough pent-up demand to see technology M&A continue on its upward track: ‘I think there is enough dynamic pressure in the way consumers are changing behaviour, and the way that the software industry is being changed. ‘The fundamental shift is not suddenly going to stop, even if the economic outlook takes a turn for the worse.’ n


Mergers & Acquisitions 53


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60