Tech M&A Spending: A Record No One Saw Coming

0
Tech M&A Spending: A Record No One Saw Coming

According to a newly released analysis from S&P Global Market Intelligence, the total value of tech and telecom transactions announced around the plague-ravaged world in 2020 topped $602bn, according to 451 Research’s M&A KnowledgeBase.

Play Quizzes 4

Get The Full Series in PDF

Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q3 2020 hedge fund letters, conferences and more

Thank you in advance for citing  "451 Research, part of S&P Global Market Intelligence, should you choose to use any of this information in your reporting. If you have word count limitations, "451 Research, S&P Global Market Intelligence" works too.

London Value Investor Conference 2022: Chris Hohn On Making Money And Saving The World

business activist 1653311320Chris Hohn the founder and manager of TCI Fund Management was the star speaker at this year's London Value Investor Conference, which took place on May 19th. The investor has earned himself a reputation for being one of the world's most successful hedge fund managers over the past few decades. TCI, which stands for The Read More

451 Research is the enterprise and emerging technology research group of S&P Global Market Intelligence and was acquired by the division in December 2019.


S&P Tech M&A: A Record No One Saw Coming

By Brenon Daly

January 7, 2021

In a year dominated by a global health emergency that no one saw coming, 2020 also notched a record that virtually no one saw coming: Tech M&A spending last year soared to its highest level since the dot-com collapse. Astonishingly, almost impossibly, the total value of tech and telecom transactions announced around the plague-ravaged world in 2020 topped $602bn, according to 451 Research's M&A KnowledgeBase.

Last year's record performance came in a historically abrupt boom-bust cycle. A recession-led decline that typically grinds lower for years only knocked dealmakers out of the market for a few months in 2020. By summer, acquirers' pent-up demand -- combined with Wall Street's confidence in the tech sector to thrive, not just survive, during the pandemic – flooded into the tech M&A market:

  • After spending on acquisitions in Q2 dropped to its lowest quarterly level in a decade, the average totals for both Q3 and Q4 came in more than six times higher than spring's slump, according to the M&A KnowledgeBase.
  • Deal volume also picked up dramatically in the back half of the year, our data indicates. Acquirers in both the fall and winter quarters announced 40% more transactions than Q2, helping to make 2020 the busiest overall year for tech deals since 2016.

The against-the-odds recovery in tech M&A even outpaced the stunning bull market rebound on Wall Street. (On a total return basis, the S&P 500 climbed 18% in 2020, led by a 44% gain by the tech names in the benchmark index, according to S&P Global Market Intelligence.) Tech acquirers and investors enjoyed one of the few true 'V-shaped' recoveries in last year's otherwise ruinous COVID-19 pandemic.

Annual Tech M&A Spending vs. S&P 500 Performance, 2004-2020

Tech M&A Spending

Source: 451 Research M&A KnowledgeBase; S&P Global Market Intelligence

Updated on

Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
Previous article What Is The New Normal For Businesses And AP?
Next article Will Nio Or Tesla Stock Grow More By 2022

No posts to display