PwC Q2 M&A report: Actual acquisitions decline; rumors about mergers on the rise

Analysts found that the number of deals that were announced (or at least rumored about) were up in the tech space last quarter.


Mergers and acquisitions continue to be tricky in the technology vertical, based on the second quarter tech M&A report from Pricewaterhousecoopers.

The global consulting firm reported that the number of deals that actually went through represented a decline on both an annual and quarterly basis.

Specifically, Q2 ended with 32 transactions completed, a 22 percent decrease from to 41 in the first quarter. The average deal value increased to $433 million, up from $253 million in Q1.

However, at the same time, analysts found that the number of deals that were announced (or at least rumored about) represented an increase.

Translation: That could mean good things on the horizon for technology companies.

Last quarter , PwC analysts found that tech M&As actually dropped abruptly to a 4-year low last quarter.

Nevertheless, they maintained a positive outlook for more robust deal activity ahead as political and economic uncertainties subside. Despite some maelstroms surrounding consumer tech IPOs, analysts also predicted better public debuts for tech companies this year.

Analysts maintained that outlook in the Q2 report, especially accrediting recent changes surrounding the Jumpstart Our Business Startups (JOBS) Act.

Earlier in July , the U.S. Securities and Exchange Commission voted 4-1 to lift a ban on advertising fundraising efforts by startups and venture capitalists ahead of going public.

Additionally, PwC reported that the volume of new pricings more than doubled quarter-over-quarter in Q2 to 15, with proceeds in excess of $2.6 billion.

Rob Fisher, PwC’s U.S. technology industry deals leader, predicted further in the report that there will be more robust M&A activity in the tech space over the next two quarters.

With increased momentum among private equity buyers, significant unused corporate cash on hand, and more technology companies moving to fully embrace cloud and capture an increasing share of mobile consumers, the fundamental drivers of technology remain strong. As technology players identify new avenues to fuel growth, we anticipate the rise in proposed transactions will invigorate technology M&A for the remainder of 2013.