August 14, 2023 – Solganick & Co. has published its latest M&A Market Update on the Technology Services industry sector.
Here are the highlights of the report:
- Transaction volume and valuation multiples for technology services companies has remained solid during the first half of 2023, continuing to exceed pre-pandemic levels in aggregate. Strong balance sheets and available capital from both financial and strategic acquirers has helped support deal activity and valuations, particularly for companies in the middle market and lower middle market.
- The technology services sector is highly fragmented and presents significant opportunities to build high-growth and differentiated platform investments.
- We expect that AI/ML competencies (particularly within cloud computing), cybersecurity, software development, and digital transformation will be key areas of interest for investors during the remainder of the year. Demand for specialty firms supporting application software platforms continues to be very strong, particularly for partners of applications supporting large and growing market opportunities (e.g., public cloud computing adoption, data analytics, cybersecurity).
- Demand among strategic and financial acquirers for software application partners continues to grow, with considerable levels of capital available to deploy towards M&A in the coming years.
- Financial and strategic acquirers continue to be increasingly for providers of managed security services (MSSPs), providing managed services around penetration testing, managed detection response (MDR) and identity and access management (IAM), among others.
- Transaction activity and valuations within the middle and lower-middle market for software development firms remains robust. Strategic and financial acquirers continue to deploy significant levels of capital in companies providing software engineering services, underscoring the continued market demand and growth opportunity in the space.
Download the full report here: Solganick Technology Services M&A Update- August 2023
About Solganick & Co.
Solganick & Co. is a data-driven investment bank and M&A advisory firm focused exclusively on technology services and software companies. Founded in 2009 with offices in Dallas and Los Angeles, the firm has completed multiple M&A transactions with fast-growing and established technology firms globally.
For more information on this report, or to inquire about an M&A opportunity, please contact us.