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Q3 2016 Information Technology Industry Spotlight


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There is a distinct sentiment that mergers and acquisitions (M&A) in the information technology industry will accelerate in the back half of 2016. Activity fell only somewhat at the start of 2016, only to stabilize in the second quarter, while the total value of all deals closed stood at a massive $122.4 billion for the first half of the year. That isn’t even accounting for some of the largest IT M&A transactions already struck, but not yet closed, including Microsoft’s $26.2 billion purchase of LinkedIn.

The IT sector is experiencing simultaneous maturation and proliferation. As every business begins to incorporate or further enhance its products and services with relevant technology, buyers look to augment their teams and capabilities through M&A.

Key highlights from the second quarter:

  • After a significant dip of 11 percent in volume between the end of 2015 and the first quarter of 2016, M&A activity ticked upward slightly, stabilizing at 401 completed transactions in the second quarter for a total of $50.2 billion.
  • The average transaction size was quite high at $716.8 million in the second quarter, the fourth-highest quarterly tally of the past three and a half years.
  • Private equity activity picked up the pace in the second quarter, with 44 closed exits, primarily in software.

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