Since Allied Advisers’ last report on Navigating M&A in Uncertain Markets in Q3 2022, we have observed certain key trends emerge in the M&A markets that are highlighted in this update. While 2010-2021 were robust years for M&A and capital raises for technology companies, the markets today have changed significantly in terms of deal volume and valuation though we are seeing improvements to a more rationale and sustainable market.
With the major indices rebounding this year from the lows of 2022; the question of “are the market conditions right” still remains in the minds of investors and executives interested in exploring M&A. This article covers some of the M&A trends including that private equity (PE) continues to be major driver of deal volume, there have been new technology M&A buyers among larger private companies, and we are seeing stabilization of deal volume and value. Also, the IPO of Arm (Semiconductor), Klaviyo (Software) and Instacart (Internet) not only provided a litmus test about what private companies are worth in public markets but also created currency, potentially opening the door for them and a slew of other companies for future IPOs and M&A.
We at Allied Advisers are also sharing our own observations and our perspectives on how to achieve a successful M&A outcome in the current environment. In the last 12 months, we advised clients on their exit to: Activision Blizzard King, the world’s largest game network and a Fortune 500 company; Walmart, a Fortune One company; Dura Software, a software consolidator; PSG Equity, a top tier PE fund ($22.1B AUM); and Virtana, a growing PE backed company among others.