M&A Update Technology Sector Q3 2023

M&A market developments and valuation environment in the third quarter

The third quarter of 2023 indicates a recovery in the TMT market and shows increased M&A activity in Europe. Nevertheless, the market continues to remain volatile due to macroeconomic influencing factors.

The increase in M&A activity and the increased number of European and German transactions indicate a recovery from the downward trend that has persisted since Q1 2023. For the first time in 2023, increased M&A activity is observed compared to the previous quarter. The number of European transactions increased from 397 in Q2 to 429 in Q3.

Challenging macroeconomic factors impacting the operating business and existing financing are pressuring the current market environment. Asset-light business models and add-ons as part of a buy-and-build strategy remain highly attractive for buyers. Realized transactions are still taking place at stable valuation levels. Individual TMT sub-sectors show an increase in transaction activity and valuation levels.

In our M&A update, we analyze the current valuation environment of the tech sector, focusing on the following developments in particular:

- The European M&A activity as well as background information on selected transactions

- The current valuation level in Europe and Germany

- Various sub-segments in the Tech stock market

Furthermore, we present one of our latest tech deals from the UK: the acquisition of GTT, a Spanish market-leading software provider for electronic management of public services, by Stirling Square Capital Partners, a British financial investor.

We hope you enjoy reading the report and look forward to exchanging ideas with you soon.