Lexington is pleased to provide its Q3 2023 IT and Technology market report which analyses the key themes that have shaped M&A activity this quarter.
This report studies deal volumes and valuations in the sector and compares them with historical levels to assess how M&A activity has progressed since 2019. We have tracked M&A activity in the IT & Technology space to identify the most active subsectors this quarter. Our findings showed that application software and software development companies were the most active subsectors and together accounted for over 60% of total deals in the sector.
This quarter has seen a 10% decline in overall deal volumes in the sector compared with the previous quarter. Despite this, valuation multiples in the sector have continued to increase as macroeconomic projections begin to brighten. Private Equity/Venture Capital transactions drove a significant proportion of deals this quarter, accounting for 53% of total transactions, indicating that significant appetite in the sector remains and there is a growing confidence in the market outlook. Having under deployed capital in the first two quarters of the year, we have seen Private Equity capitalise on attractive investment opportunities in high growth areas such as artificial intelligence, machine learning, and digital transformation this quarter.
Despite economic factors faced during the year, IT & technology remains an attractive sector for both Private Equity investors and strategic trade buyers and we are optimistic that deal opportunities will increase into Q4 2023 and beyond.
If you are considering embarking on a growth journey or an exit of your Business, or would like to learn more about the services we provide at Lexington, please do get in touch and we would be more than happy to discuss this further with you.
View the report here – IT Technology MA Review – Q3 2023