Ciesco, a specialist M&A advisory firm operating in the tech, digital, media and marketing sectors, has disclosed that M&A activity recovered from and exceeded pre-pandemic levels in Q1 2021, as companies competed to stay ahead of new trends by acquiring needed capabilities.
The company recorded 472 transactions, a 36 percent increase year-on-year from Q1 2020, already a strong, pre-covid quarter, when 346 deals were recorded. In notes accompanying the data, Ciesco stated that a key driver behind the M&A’s is that companies are rushing to stay ahead of a wave of trends driven by the pandemic, including shifts in working practices and environments, lifestyles, facilities, shopping and healthcare.
Digital, MarTech and media were the most active target sectors in Q1 2021, representing 61 percent of all deal activity and the greatest rise in deal volume, an increase of 55 percent across these sectors. There was a fall in activity in the events sector and the strategy & creative services sector.
Other key findings are:
- The capabilities most desirable to buyers are technology and data-driven solutions. Ciesco also sees activity growing around consumer research and social and analytics tools in particular, as well as e-commerce solutions, business productivity solutions, MarTech, AdTech
- Overall disclosed value of deals has increased from $12.4 billion in Q1 2020 to $28.4 billion in Q1 2021
- Assets are scarcer than the capital available to buy them, driving competition on the buy-side
- Private equity firms continue showing a growing appetite for deal-making across tech, digital, media and marketing.
In the tech, digital, media and marketing spaces, S4 Capital and Accenture were the most active buyers in Q1. Each recorded six acquisitions. S4 completed three acquisitions via Mediamonks and three by MightyHive. Among other top buyers in the space are Pocket Outdoor Media, a content, experiences and travel company, with four acquisitions and Digital Turbine, Twitter, Clearlake Capital Group and The Carlyle Group with three transactions each.
The two largest markets remain the USA and the UK, where 196 and 57 deals were struck, respectively, representing 54 percent of overall activity and a year-on-year increase of 12 percent. They were followed by Germany, France, Canada, Sweden and Italy. These countries combined represent 77 percent of all global deal activity.
Chris Sahota, CEO of Ciesco, said: “M&A activity has not just recovered rapidly from pre-COVID levels but is exceeding it. The world has changed, and companies are racing to acquire the capabilities they need to thrive now and in future.”
This is part of a trend towards reinvention in 2021 and it is being driven by technology and dataChris Sahota, CEO, Ciesco
“Buyers are congregating around consumer and B2B data analytics, social listening tools and e-commerce, among other technological capabilities. This is a trend that will only accelerate.
“Overall, what Q1 activity reflects is a widespread ambition among businesses in technology, digital, media and marketing to adjust quickly to the new normal and put themselves in the best position to flourish in the post-COVID era.”