Nearing the bottom? Q2’23 M&A trends in TMT

After a lackluster start to the year, deal activity faltered again in Q2’23, with deal value falling 32 percent from Q1’23 on a 15 percent decline in deal volume.

Technology transactions suffered another pullback, with deal volume decreasing to 854 from 1,011 in Q1’23 while deal value dropped to $23.9 billion from $47.4 billion. Telecom deal volume cratered as the number of transactions fell to 44 from 74 in Q1’23, but combined deal value remained steady at $5.9 billion from $5.8 billion thanks to a single $5.5 billion transaction. The media subsector bucked the trend: even though deal volume declined to 354 from 382 in Q1’23, deal value more than tripled to $8.4 billion from $2.6 billion. This was mainly due to the third biggest TMT deal for the quarter—Savvy Games’ $4.9 billion bid for mobile game maker Scopely.

Notable M&A trends in TMT in Q2’23 included:

• Cloudy forecasts: Deal makers struggled against the headwinds from high interest rates, a crisis in regional banks, and fears that the U.S. economy may slide into recession.
• Shrinking deal value: Total deal value was even lower than that of Q2’20 at the height of the pandemic.
• No thanks to megadeals: Small transactions drove TMT deal making. Only six transactions topped $1 billion.

However, we see early signs of a turnaround in sentiment. Even at lower valuations than desired, companies in need of cash are now looking at potential carve-out sales. As sellers become more active, this could generate more interest on the buy side as well—building momentum toward a new upswing in deal making in the coming months.

Get your copy of our comprehensive review of the TMT deal trends in Q2’23 and what to expect in H2’23.