Rise and Fall
As the technology, media and telecom sector experience massive growth spurred by seemingly endless innovation across the web’s various digital platforms, traditional media is becoming increasingly obsolete.
The U.S. Information sector generated $1.26T in 2013 across 37 tech, media and telecom industries. The industry is projected to increase 3.1% by 2018 despit steady declines in print media and publishing. In fact, of these 37 industries, 14 are in the declining states of their life-cycles, which demonstrates the massive growth among the newer sectors of the industry. The following graph provided by IbisWorld highlights the industry’s key statistics:
Fastest Growing Sectors
The six fastest growing sectors in the industry (as outlined in the graph below) include internet publishing & broadcasting, search engines, operating systems & productivity software publishing, video game software publishing, and voice-over IP. These industries have experienced strong demand growth over the past five years, especially strong before the recession, and are projected to continue to grow over the next five.
The Future of the Industry
By 2018 the industry is forecast to be worth $1.47 trillion spurred by continued innovation, expansion and M&As.
In today’s increasingly globalized society, so too are M&As occurring cross borders. The top acquirers of U.S. tech companies span Europe, Asia and Canada. Over 2200 private tech companies were acquired across the glove in 2012.
A deeper dive into cross-border M&A activity of US technology firms in 2012 shows Canada and the UK were the top acquirers. India, Japan and Germany round out the top 5.
Nearly 50% of these cross-border tech M&As occurred in the internet sector followed by software which represented nearly 20% of deals globally.
Lastly, the majority of cross-border M&A deals (32%) consisted on companies based in California, followed by New York at 12%.
*Data and graphs courtest of CB Insights.
Since 2011, 252 private medical device companies have been acquired. M&A deals levels. In the trailing four quarters (Q2’12 to Q1’13), there have been 132 private medical device companies acquired versus 97 in the prior four quarters (Q2’11 to Q1’12) highlighting 36% growth YoY. Almost 9% of the private medial device M&A exits have seen valuations of more than $1 billion.
Although the valuation multiple ranges were quite wide in 2011 and 2012, we are seeing a tightening and contracting of these multiples in 2013 as demonstrated in the graph below that highlights the distribution of price/sales valuation multiples for these private company acquisitions.
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