Q1 M&A in tech, digital and media bucks expectations with healthy diagnosis despite major global uncertainty, says Ciesco.
Q1 2023
- Despite widespread uncertainty, continued supply chain issues, surging inflation and the Russia-Ukraine conflict, global M&A deal activity in tech, digital, media and marketing fell just 3% on the same period in 2022 in Q1.
- Strong activity was seen across the Digital Services, AdTech/MarTech and Content & Production sub-sectors, which accounted for 61% of deal activity in the focus sector.
- The PR & Communications and Events & Experiential sub-sectors saw a rise in activity over Q1 2022, up 117% and 30% respectively.
- The USA, UK and Western Europe were the most active M&A markets; M&A activity climbed 62% year-on-year in the APAC region.
- PE and PE-backed firms continue to be a strong buyer category. Private Equity buyers made 40% of all acquisitions, as they did in Q1 2022, whilst Strategic Acquirers held their proportion of 60%.
- Ciesco Chief Executive Chris Sahota underscored the importance of resilience and adaptability for business success in 2023.
April 2023, London
Despite expectations of a steep drop in M&A activity in the technology, digital, media and marketing spaces, these sectors remained ‘healthy’ in Q1 – offering a positive outlook amid global uncertainty, the specialist advisory firm Ciesco has said.
Against a backdrop of supply chain issues linked to Covid and China’s shutdown, an economic downturn, and nervousness connected to the collapse of Silicon Valley Bank and the continuing Russia-Ukraine war, there were 493 transactions across tech, digital, media and marketing – a year-on-year fall of just 3%.
There was strong activity across the Digital Services, AdTech/MarTech, Digital Media and Content & Production sectors. The PR & Communications and Events & Experiential sub-sectors also saw a rise in activity.
Specialist M&A advisory firm Ciesco, which tracked the transactions, said that the USA and the UK were the most active M&A markets in Q1 of 2023, representing 49% of all global deals. They were followed by France, Canada, Australia, the Netherlands and Germany, all of which combined represented 70% of total deal volume.
The firm’s Global M&A Q1 2023 Update showed it was also a busy quarter for M&A in the APAC region, which saw the greatest year-on-year increase in deal-making. M&A activity climbed 62% from the same period in 2022, with Australia leading the market by 25%.
Chris Sahota, Founder and CEO of Ciesco, said that given the surrounding uncertainty, M&A activity in the tech, digital, media and marketing sectors had been ‘healthy’. He added that, despite challenges, he expected M&A activity to remain constant over the rest of the year. “We’re grappling with a great deal of uncertainty”, he said. “But market expectations were overly pessimistic.”
"The results of Q1 should be seen as a major positive. The sudden collapse of Silicon Valley Bank will have made some tech investors cautious, but we’ve seen a very healthy appetite for M&A in the first three months of the year. The overall value of the deals disclosed has increased by 14%, and in the $12.5 billion acquisition of Qualtrics by Silver Lake and CPP Investments, we’ve also seen our first so-called mega-deal of 2023. The kind of resilience and adaptability that became a hallmark of successful organisations during the pandemic is proving to be key to business success in our specialist sectors. It’ll be a real focus for businesses this year. Private Equity, with its substantial dry-powder funding, continues to be an aggressor in terms of activity across the sector."
About Ciesco
Ciesco is a leading specialist M&A firm with a focus on the technology, media and healthcare sectors. Headquartered in London and operating globally, Ciesco offers a unique combination at partnership level of senior industry practitioners and sector specialist investment bankers. This enables an extensive network of contacts and strong relationships that reach into organisations worldwide at C-suite sponsor levels. Ciesco is well regarded in the market for its specialist advice derived from the deep understanding of the sector, industry and buyer landscape insights, and execution expertise.