Articles
08 February 2023
The technology sector has underperformed the broader market in 4Q22, as rising interest rates and economic slowdown continued to keep valuations suppressed. M&A activity has increased compared to 3Q22 after four consecutive quarters of decline, signaling a potential return to the sector's healthy pre-pandemic deal volumes.
Despite the rebound, buyers are increasingly focusing on smaller deals as recessionary fears have triggered a ‘small purchase effect’. Smaller peers are looking to remain competitive by selling to larger structures, while bigger firms are still assessing the new valuations reality.
We expect transactions to follow this trend for at least the first half of the year.