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IT Services M&A Update: Q4 2023 and 2024 Outlook Summary

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Navigating the Current M&A Landscape for IT Services: Cloud & Data Analytics Partners Take Center Stage

by Aaron Solganick, CEO, Solganick & Co.

December 21, 2023


The IT services M&A scene in 2023 has painted a dynamic picture, marked by both cautious optimism and strategic boldness. While overall deal volume dipped slightly compared to the record-breaking highs of 2022, falling by around 5%, the total value of transactions remained surprisingly resilient, hovering near the $400 billion mark, according to data from S&P Global Market Intelligence. This indicates a shift towards larger, more strategic acquisitions driven by specific growth objectives. Cloud and data analytics expertise have emerged as key target areas, reflecting the surging demand for digital transformation solutions.


Cloud Soars, Security Steadies: Within the cloud sector, acquisitions fueled by hyperscaler partnerships have been a main driver, with deal volume jumping upwards of 20%. Leading cloud providers like AWS, Azure, and Google Cloud Platform are actively backing their channel partners through strategic investments and acquisitions. This trend is poised to continue, driving consolidation and further strengthening the cloud services ecosystem. Meanwhile, cybersecurity concerns also continue to drive M&A activity, with established players like Palo Alto Networks and Crowdstrike actively acquiring smaller firms bolstering their security portfolios.


Valuation Adjustments, Strategic Optimism: Despite the overall M&A market facing headwinds from inflation and rising interest rates, valuations within the IT services sector have remained relatively stable. Median purchase price multiples for IT services businesses held steady compared to 2022, fluctuating between 10x-12.5x EBITDA. This suggests a degree of resilience and continued investor confidence in the long-term growth potential of the industry. Large strategic buyers including Accenture, Deloitte, Cognizant, and NTT Data, in addition to private equity firms that currently are invested in the sector, are still seeing attractive opportunities, particularly in high-growth areas like cloud and data analytics.



Looking Ahead: While the immediate future may hold some uncertainty, the underlying drivers of M&A activity in the IT services space remain robust. The demand for digital transformation, cloud migration, and data-driven insights continues to surge, fueling strategic acquisitions and partnerships. For IT services companies, particularly those with strong cloud and data analytics expertise, the M&A landscape presents both opportunities and challenges. Navigating this dynamic environment with the right expertise and strategic vision will be key to unlocking long-term value in the years to come.



About Solganick & Co.

Solganick & Co. is a data-driven investment bank and M&A advisory firm focused exclusively on software and IT services companies.  Our deal team has completed over $20B in M&A transactions to date. We have completed transactions with Accenture, Atos, CapGemini, Hitachi Consulting, Fujitsu Consulting, Stefanini IT Group, Sunstone Partners, and several others. Formed in 2009 with offices located in Los Angeles, CA and Dallas, TX, the team works with fast growing and established technology companies looking to buy or sell/merge their business with strategic and/or financial partners.


For more information on our M&A outlook for the IT services industry sector, or to inquire about an M&A opportunity, please contact us.










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