Transaction volumes v IPOs
There were 3,215 acquisitions involving European technology companies in 2007, a decline of 2% from the 3,295 deals announced in 2006. This indicates that the growth trend of the last few years has come to an end after deal flow plateaued at just about 800 deals a quarter. The combined value of all deals in 2006 was up 4% to $349 billion compared to $337 billion a year earlier. Our prediction for 2008 is that deal flow will remain at healthy levels, perhaps with some tailing off as the year progresses. It is evident that the current activity is being fuelled by the confident performance of the industry as a whole but if the predicted economic slowdown takes hold then it will have an inevitable effect on deal flow.
IPO activity continues to be quite volatile. The 104 new listings in 2007 were well down on the 145 in 2006. Most of these happened in Q2 before economic woes hit. It was very difficult to get even 'quality' IPOs away in the seconf half of 2007. There is no evidence that this situation will improve in 2008 - indeed we will see a significant decline in IPOs even from 2007 levels.
Software and IT Services transactions
In the Software and IT services sectors, which I know interests many HotViews readers, there has been a trend towards much higher value deals. Although the number of transactions in this sector has fallen slightly from 1303 in 2006 to 1261 in 2007, the total value of these deals has increased significantly from $49b to $88b. The number of deals valued at $1b or more has more than doubled from 6 in 2006 to 15 in 2007 with a significant increase in the $100m-$1b range - up from 51 in 2006 to 74 in 2007.
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