Ciesco: PE buyers drive M&A boom – S4 Capital and Accenture busy buyers in Q1

Specialist M&A advisory firm Ciesco, which operates in the tech, digital, media and marketing sectors, reports 472 transactions in Q1 2021, a 36 per cent increase year-on-year from Q1 2020, a strong, pre-covid quarter, when 346 deals were recorded and an even stronger increase of 80 per cent on Q1 2019.

Companies are now rushing to stay ahead of a wave of trends driven by the pandemic,including shifts in working practices and environments, lifestyles, facilities, shopping and healthcare.

Ciesco reports that the overall disclosed value of deals increased from $12.4 billion in Q1 2020 to $28.4bn in Q1 2021 — just under the Q1 2019 level of $30.2 billion.

It says the pandemic has had little impact on the valuations of healthy businesses and even a positive impact on those ‘premium’ companies, especially the ones that traded well through 2020.

Private equity firms are showing a growing appetite for deal-making across tech, digital, media and marketing. Deal volume has increased 73 per cent on 2020, with 218 deals announced this past quarter. The disclosed deal value of PE deals has almost doubled, reaching $13.4bn. PE buyers accounted for 46 per cent of all transactions in Q1, compared to 36 per cent in Q1 2020 and 43 per cent in Q1 2019. PE buyers are acquiring both platform and bolt-on businesses across a range of sectors.

Strategic buyers are finding themselves playing catch-up, having recognised the need to invest in new capabilities in order to drive growth. There was a 15 per cent year-on-year increase in Q1 activity among these, with 254 transactions announced in 2021.

Among the major PE deals are Avedon Capital’s acquisition of Netzkern and Macaw, that created a new significant tech services group and the largest Sitecore player in Europe; TripleLift, one of the largest adtech platforms in the world, announced its sale to Vista Equity Partners for $1.4 billion and the UK-based online consumer intelligence and social media listening platform, Brandwatch, was also acquired by Cision (owned by Platinum Equity), for $450 million.

Currently PE investors are sitting on over $1.5 trillion of raised capital globally.

In the tech, digital, media and marketing spaces, S4 Capital and Accenture were the most active buyers in Q1. Each recorded six acquisitions. S4 completed three acquisitions via MediaMonks and three by MightyHive. Accenture acquired companies in digital design, transformation and consulting.

Among other top buyers in the space are Pocket Outdoor Media, a content, experiences and travel company, with four acquisitions and Digital Turbine, Twitter, Clearlake Capital Group and The Carlyle Group with three transactions each.

ciesco CEO Chris Sahota says: “M&A activity has not just recovered rapidly from pre-COVID levels but is exceeding it. The world has changed, and companies are racing to acquire the capabilities they need to thrive now and in future.

“This is part of a trend towards reinvention in 2021 and it is being driven by technology and data. Buyers are congregating around consumer and B2B data analytics, social listening tools and e-commerce, among other technological capabilities. This is a trend that will only accelerate.”

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