Private equity bounce-back to fuel 2011 tech M&A

PricewaterhouseCoopers points to cloud computing and mobile technology as potential M&A hotspots

PricewaterhouseCoopers (PwC) has tipped 2011 as a big year for tech M&A activity, citing an influx of cash-rich buyers and private equity funding.

As a result, the auditor predicts that the level of M&A activity seen in the technology sector last year should continue through 2011.

Andy Morgan, a partner at PwC, said: "More high-quality assets are now being brought to market as sellers seek to take advantage of the presence of cash-rich corporates with a renewed appetite for mega-deals."

According to PwC's figures, there was a 32 per cent year-on-year increase in the number of M&A deals in 2010, which peaked at 393. Meanwhile, the total value of these deals stood at £62.8bn, which is more than double the worth of those completed in 2009.

Morgan said the technology sector should also benefit from the renewed interest shown by private equity firms.

The combined value of private equity deals was £8.9bn last year, up nearly 60 per cent on 2009, according to the firm.

"We are seeing a change in deal dynamics as appetite returns. The number of pre-emptive deals is on the rise with buyers originating deals rather than competing in traditional auction processes," added Morgan.

The firm also highlighted several technology hotspots likely to see the bulk of 2011's M&A activity. These include cloud computing, mobile technology and finance software.