Europe exceeding UK in acquisition activity
Firms in UK and Ireland pull acquisition belts in while Euro neighbours splash out
Europe was the stage for $54bn worth of technology acquisitions during the first quarter of 2005, but activity has decreased in the UK and Ireland, according to a report by market watcher Regent Associates.
The firm's Analysis of European Technology Acquisitions Q1 2005 report discovered that during the first quarter of this year, the European IT market saw 682 acquisitions, an increase of 18 from Q4 last year.
Regent said the growth was in part due to the improving performance of the whole industry and also the cost-cutting exercises that European businesses have employed over the past few years.
James Calvert, chief executive of Regent Associates, said: "The market has stabilised at a high level. The more effective companies have begun acquiring and the less effective have begun to be acquired."
But the report revealed that in the UK and Ireland the number of acquisitions during Q1 this year have actually dropped by 11 to 179, down from 190 in Q4 last year.
"In the UK a slight downturn is not significant and the message is that the figures have simply begun to plateau," added Calvert.
The highest level of acquisitions occurred in the IT services sector, and the content and media sector. The communications equipment sector showed the lowest number of acquisitions.
Jeanne Razzell, managing director of VAR System Support, said: "This is a sign that the market is maturing; that's why there are very few acquisitions in the telco space."
Ian Kilpatrick, managing director of distributor Wick Hill, said: "Acquisitions can be very effective for the channel, but sometimes they have to be judged on a case-by-case basis."