IT & Business Services Report 2H2019
As companies in the IT Services sector experience pressure to reduce capital expenditure, they have remained in strong demand, as enterprises aim to modernise by using the latest technology to increase operational efficiencies.
Meanwhile, companies offering services such as cloud technology, communications, system integration tools and cybersecurity solutions have led to a rise in M&A targeting outsourced IT services.
Acquirers in 1H 2019 were large companies pivoting to pursue new opportunities, financial buyers capitalising on growth, and tech firms absorbing each other to strengthen their expertise and alleviate competition. Other trends included call centre and payment outsourcing, IT consulting, and the consolidation of IoT, virtualisation and robotics.
The report looks into the sectors Integration Services, Tech Services & Support and IT Outsourced Services and includes:
- Trends and analysis of deal activity
- Deal geography
- Top acquirers
- Valuation metrics
IT Services M&A Deals and Multiples 2013-2019
The first half of 2019 saw total disclosed deal value in the IT & Business Services market reach a whoping $97 billion - the highest total on record for a six-month period. The overall median disclosed deal amount also increased to $43 million from $23 million in 2H 2018.
Although deal volume lessened, trailing 30-month median revenue and EBITDA multiples remained within the high end of their respective range, signalling steady growth over the past six and a half years.
Our IT & Business Services report covers the two-and-a-half-year period between January 2017 and July 2019. All totals and median values refer to the entire period unless otherwise stated. Median multiples plotted in the graphs refer to the 30-month period prior to and including the half year.