Friday, November 2, 2012

CHART OF THE DAY: A Dramatic Slowdown In Tech M&A

If things are feeling slow in the tech deal space, it's not in your head.

Deal volume is stagnant and deal values are way down from 2010 and 2011.

According to a new survey of Silicon Valley dealmakers by 451 Research and Morrison & Foerster, a prominent San Francisco-based law firm, there are two primary reasons:

  • Economic uncertainty, including prospects for US growth, Europe's fiscal crisis, and America's "fiscal cliff"
  • High prices demanded by acquisition targets

So this year, big, splashy deals like Facebook's $715 million purchase of Instagram have been the exception, not the rule.

Even with SoftBank's $20 billion acquisition of a majority stake in Sprint, which will boost fourth-quarter deal numbers, it seems likely that M&A activity in 2012 will finish out the year at levels close to 2009.

chart of the day, tech m&a activity, nov 2012

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