May 23, 2016 – April has seen a flurry of acquisition activity in the cloud and IT services sectors. The slow growth and global economic uncertainty has prompted management teams to seek new ways to create revenue and generate growth. Also, due to the tightening of cash flow, firms are looking for opportunities to better position themselves in the market and gain competitive advantage. Although mergers and acquisitions have slowed down in the technology sector, deals in cloud and IT services sectors are happening at a healthy rate as the corporate demand for business analytics, software-as-a-service offerings and cloud computing remains robust.
Research also shows that the availability of financing has improved in April, compared to February. This relief in finance availability could be the impetus for the positive move in the M&A market.
Solganick & Co. noted a number of M&A transactions announced in the IT services, cloud and managed services sectors. Notable transactions included Ingram Micro’s acquisition of cloud distributor and services firm Ensim and Dimension Data’s acquisition of IT infrastructure solutions and services firm Ceyrx, Inc.
Valuations for April ranged from a low EV/Revenue of 0.54x for VAR’s and a high EV/Revenue of 2.77x for offshore IT services firms.
For more information and a list of transactions, you can view and download the complete report here:
Solganick & Co., Inc. is an independent investment banking and M&A advisory firm focused exclusively on the global Software, IT Services and Digital Media industry sectors. We advise buyers and sellers of companies and efficiently execute M&A transactions that help increase shareholder value. Our professionals have advised on $20+ billion in M&A transactions to date and have current clients and relationships globally with entrepreneurs, companies and leading private equity firms within the
sectors we cover. Please contact us for information regarding this report or to inquire about an M&A transaction.