Tech sector stands out as M&A target

The prospects of the tech sector being a ripe one for M&A activity look good with the valuations and returns being offered for investors much higher than in other areas of the economy. According to the latest KPMG Global M&A Predictor the smart money will be heading towards tech firms, more


The prospects of the tech sector being a ripe one for M&A activity look good with the valuations and returns being offered for investors much higher than in other areas of the economy.

According to the latest KPMG Global M&A Predictor the smart money will be heading towards tech firms, more specifically the telecom sector where forward P/E ratios are up by two percent.

Most of the other sectors have either seen P/E ratios drop by up to 14% over the last year, or find themselves in a poor position in terms of net debt.

Jonathan Stankler, technology M&A partner at KPMG, said that many sectors were stuck in low demand economies in the short-term but the tech sector had the ability to rise above that.

"Technological advancement could prove to be one of the exceptions as companies at the forefront of innovation find ways to lead us into the future; be it web-enabled television replacing digital in homes; music and sporting events bypassing traditional media companies to go direct to market or social network sites becoming platforms for all web services, such as e-retailing, communication and media," he said.

"As a consequence, technology companies in the mobile data space and the cloud are well positioned to deliver strong growth going forward," he added.

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