Tech Deals - A clear target for 2020

09 July 2020

2020 has presented monumental challenges to global economies resulting in many people expecting a slowdown in deal volume. However, despite these unprecedented times, deal activity in the tech sector has remained buoyant as both private equity and strategic acquirers continue to seek acquisition and investment opportunities to support their growth aspirations.  

There have recently been several high-profile transactions in the technology sector, such as VISA’s $5.3bn acquisition of Plaid – a network which securely connects financial accounts to apps. Further examples which illustrate activity in the UK mid-market include Accenture’s £107m acquisition of computer security services provider, Context Information Security and Canadian listed Constellation Software’s acquisition of Motion Software via its UK subsidiary Jonas Software (undisclosed).  

Some earlier stage Scottish based tech companies have also succeeded in attracting growth capital at a time where many investors are being extremely cautious and looking after their existing portfolio companies. Examples include the recent £1.6m investment in EC-OG led by Par Equity and AdInMo raising £500k of seed investment led by Techstart Ventures. Both investments completing during lockdown. 

The trend of M&A activity in the tech sector is certainly positive and one which we do not expect to contract any time soon. From regular dialogue with other advisors, acquirers and investors there is a real sense that businesses operating in key tech sub sectors, such as cloud computing, fintech and IT support services and in particular those businesses with a Software as a Service (SaaS) business model will be of heightened interest and focus from an M&A perspective in the upcoming months. 

2020 will be a year where technology is at the heart of every business and therefore an opportunity for those companies providing tech solutions to accelerate their growth. 

By Brian McMurray, Partner and Head of Tech at AAB

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