September was amazing for the Technology sector – we had the largest software IPO (Snowflake) and the largest semiconductor M&A (ARM), underscoring an increase of 51% in M&A deal volume from same period last year.
While tech M&A deal volume dropped in Q2, 2020, there were marquee deals and significantly increased activity in certain mission critical / Covid beneficiary sectors. We had 4 of our clients across cloud security, compliance, collaboration software and encryption exit to IBM, K1 Capital, Marlin Equity and StorMagic in the last 4 months. Long term tailwinds for Tech M&A include newly minted public buyers via IPO & SPAC, rebound in the equity markets, record capital at PE firms who are in ~1/3 of deals in tech, arrival of the Non-Tech buyer who are rapidly acquiring tech companies. Sage of Omaha is now investing in Tech companies (e.g. Apple, Amazon, Snowflake). Happy 90th birthday Warren!
The Pandemic creates structural shifts and has accelerated Digital Transformation across many sectors which will continue to generate notable deal activity in the future.
On a lighter note: In future when Warren orders drive-thru at Mickey D's, Aprrente, an AI company purchased by McDonald will automatically order Warren’s breakfast.
