It used to take acquirers roughly three months to ring up $100bn worth of tech M&A spending. In the current post-pandemic shop-a-thon, buyers are regularly blowing through that threshold in just a single month.
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Total Spending On Global Tech Acquisitions Soars
In August, total spending on tech acquisitions around the globe soared to $108bn, according to 451 Research's M&A KnowledgeBase. It marked the fifth of eight months so far in 2021 that the value of announced transactions has topped $100bn. Before this year, monthly spending had eclipsed $100bn just three times in the 20-year history of the M&A KnowledgeBase.
Our data indicates that this month featured a staggering 22 deals that were valued at $1bn or higher. Collectively, these prints at the top end of the market show that acquirers are having to stretch – both financially and strategically – to get deals done in the richly priced M&A market:
- In the largest non-SPAC transaction so far this year, Square handed over $29bn in equity for Afterpay on the first day of August. The deal valued the buy-now-pay-later provider at more than 40x trailing sales, compared with Square's own valuation of 8x, according to S&P Capital IQ Pro.
- Clearlake Capital spent $5.2bn to erase Cornerstone OnDemand from the Nasdaq, valuing the HR software vendor at a steep 25x EBITDA. Our data indicates that the early August transaction is four times larger than any other take-private Clearlake has done.
The continued strength this month in the tech M&A market pushes overall spending so far in 2021 to $880bn, which is nearly twice the recent full-year totals recorded in the M&A KnowledgeBase. At the current shopping rate, the total value of tech acquisitions in 2021 will cross the previously unimaginable spending threshold of $1 trillion with most of the fourth quarter still remaining.
Recent Monthly Tech M&A Activity
Source: 451 Research M&A KnowledgeBase; S&P Global Market Intelligence
Article By Brenon Daly, Research Director with S&P Global Market Intelligence's 451 Research