Encouraging signs: Q2’24 M&A trends in TMT

Despite the recent downturn in technology, media, and telecom (TMT) M&A activity, private equity (PE) firms are showing signs of optimism and are preparing for a recovery in the coming months. PE investors have been focusing on improving the operations of their portfolio companies, making select platform deals, and executing bolt-on acquisitions to add capability and scale. As macroeconomic conditions become more favorable, with moderating inflation and potential interest rate cuts, PE firms are well-positioned to capitalize on new opportunities in the TMT sector.

Here are some key trends and insights from the second quarter:

• TMT deal volume remained steady compared to Q1'24, with cautious optimism returning to the market.
• Media was the most dynamic subsector, with deal value soaring 141 percent from the previous quarter, driven by the $13 billion Silver Lake-Endeavor deal.
• PE deals outperformed strategic ones, with PE deal value rising 118 percent on eight percent fewer transactions, while strategic deal value fell 59 percent on four percent more transactions.
• Technology deals had mixed results, with a slight increase in the number of transactions but a drop in combined value due to the absence of megadeals like the Synopsys-Ansys merger in Q1'24.
• Telecom dealmaking weakened across the board, with a 5.6 percent decrease in the number of transactions and a 42 percent slump in total value.

As we move forward, PE investors are focusing on optimizing go-to-market capabilities, exploring liquidity enhancements, and enhancing productivity through the tactical deployment of artificial intelligence (AI). The TMT sector remains attractive for PE investments, and the current slowdown in deal activity is likely temporary before growth rebounds. Download our paper, Q2'24: Technology, media, and telecom M&A deal trends report, to gain insights on M&A in the TMT sector.