Rapid Shift To Online Puts IT & Business Services Onto Frontline
London, UK – 8 September 2020.The latest IT & Business Services M&A market report from Hampleton Partners, the international technology mergers and acquisitions advisor, reveals how Covid-19 is putting the IT sector on the frontline despite the pandemic’s impact on deal volumes and valuations, with IT departments and suppliers remaining crucial in the shift of entire companies online and in the e-commerce boom.
In the first half of 2020, transaction volume dipped to 378 deals, compared to the 416 deals recorded during the second half of 2019.
Along with the number of deals, some valuation multiples came in lower: the trailing 30-month median EBITDA multiple dropped to 9x – the lowest in four years – while the revenue multiple remained stable at 1.2x.
Miro Parizek, founding partner, Hampleton Partners, said:
“So far in 2020, the IT & Business Services sector has seen stable M&A activity. Lockdown measures around the world have accelerated the move to digital, providing ample opportunity for IT players to shine if they can digitise products, processes and services.
“At the same time, valuations have come in somewhat lower and deal-making was more regionally oriented, especially in Q2, as global travel was impacted by travel restrictions.
“Unsurprisingly, outsourcing companies, which offer services ranging from payment processing to software development, continue to enjoy strong growth on the back of improved global connectivity and the ever present need to reduce costs.”
Companies in the IT Outsourced Services segment continued to attract the highest valuations - 9.7x trailing 30-month median EBITDA multiple. The Tech Services & Support segment accounted for 44 per cent of deals, the largest in the IT & Business Services sector.
The largest disclosed deals of 1H 2020
The top three largest disclosed IT & Business Services were: Veritas Capital’s acquisition of the health & human services business of DXC Technology for $5bn - at 3.6x EV/S; WESCO International’s acquisition of Anixter International Inc. for $3.5bn at 0.5x EV/S and SAIC’s $1.2bn acquisition of the Federal assets of Unisys Corporation at 1.7x EV/S
Hampleton’s IT & Business Services M&A report analyses transactions, trends and activity across the Integration, Technology and Support Services segments as well as IT Outsourcing.
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Note to editors
Hampleton Partners’ IT & Business Services M&A Market Report 2H 2020 is compiled using data and information from the 451 Research database (www.451research.com). For more information on this or anything else related to our research, please email the address provided below.
Download the full Hampleton Partners’ IT & Business Services M&A Market Report 2H 2020: https://www.hampletonpartners.com/reports/it-business-services-report/.
About Hampleton Partners
Hampleton Partners is at the forefront of international mergers and acquisitions and corporate finance advisory for companies with technology at their core. Hampleton’s experienced deal makers have built, bought and sold over 100 fast-growing tech businesses and provide hands-on expertise and unrivalled advice to tech entrepreneurs and companies which are looking to accelerate growth and maximise value.
With offices in London, Frankfurt, Stockholm and San Francisco, Hampleton offers a global perspective with sector expertise in: Artificial Intelligence, Autotech, Cybersecurity, Digital Commerce, Enterprise Software, Fintech, Healthtech, HR Tech, Insurtech and IT & Business Services.
For more information visit https://www.hampletonpartners.com.
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