Updata Publishes Q3 2008 IT M&A Review

Q3 2008 has seen unbelievable market turbulence. Although the number of deals we tracked in Q3 is just slightly up from Q2, announced enterprise value has fallen way down – a 51% drop.

"While deals are still getting done, they are taking longer to complete as buyers are cautious yet opportunistic during an uncertain economic period," said Ira Cohen, Managing Partner at Updata Advisors. "The climate tends to favor strategic versus financial buyers, as they continue to seek key acquisitions to capture market share, expand product portfolios or reach new customer segments. We're also seeing selected cross-border activity with U.S. targets."

Highlights from the report include:

• Private equity deals are down 43% among the M&A transactions tracked by Updata this quarter versus last quarter.
• 41% of the transactions for this quarter were cross-border deals. Among the cross-border deals that Updata tracked this quarter, 37% involved a U.S. target company versus only 17% for similar transactions in Q2 of 2008.
• M&A trends vary by sub-sector. Financial technology transactions represented 43% of all enterprise application software deals tracked by Updata in the quarter, driven by acquisitions of processing, lending, consumer protection and identity theft solutions.
• Total enterprise value for enterprise application software and security M&A is up from Q2 2008. Median multiples of enterprise value over trailing twelve months' revenue are up from last quarter in infrastructure software and security.

To see the full report, click here.