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IPO’s in tech sector are in decline while M&A booms

Written by Robert McHugh, on 26th May 2015. Posted in Technology

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M&A activity in the tech sector continues to boom internationally while the number of companies completing IPOs has sharply declined according to the quarterly BDO TECHtalk report, which gives a comprehensive view of key trends and deals in the technology industry.
 
Collated by BDO, the first quarter study shows that M&A activity within the tech sector was worth a record-breaking $84.3 billion dollars in Q1 while the number of technology companies completing IPOs continues to nosedive at just 14. 
 
The first quarter of 2015 saw global technology deal volumes of $84.3bn, one percent higher than last year which was previously the highest total for a first quarter in over a decade. Over the period there was a total of 400 technology related deals - almost double the 211 deals seen in Q1 2014.
 
Furthermore, the fundraising environment for the technology sector is likely to remain positive. Investors remain hungry for these types of innovative assets, and M&A experts predict the sector will receive a significant capital boost from both VC and PE firms in the next 12 months –particularly in the areas of cloud storage and mobile enterprise solutions.
 
Corporate Finance Partner with BDO, Con Quigley said, "We are somewhat disappointed to note a cooling of the IPO market. This development is primarily due to the vast amount of capital available from large international Private Equity and Venture Capital funds.

Big name companies like Uber and Snapchat have raised over $10bn on private markets in Q1 2015, nearly 10 times that raised through IPO’s. More worryingly only 14 technology companies completed IPOs worldwide in Q1 and we are told there is little sign of a queue of companies following them."

Source: www.businessworld.ie

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