As we look ahead to the second half of 2022, the TMT sector is likely to continue to experience high deal volume, as digital adoption drives influence and relevance in global markets. In the first half of 2022, software deals alone accounted for approximately one-quarter of global deal values across all industries.
In a volatile market, shaped by global dislocations, inflation, higher interest rates, taxes, regulation and fallout from COVID-19, dealmakers remain optimistic that the rapid speed of change will create significant M&A opportunities, particularly in the technology sector. Triggered by the changing landscape, we expect TMT players—especially cash-flush companies and private equity (PE) funds—to engage in M&A throughout the remainder of 2022 as they seek to remain competitive and navigate the current uncertainties, including the risk of an economic slowdown.
Currently, consumer demand is driving strong M&A opportunities throughout the value chain of infrastructure-enabling technologies. The long-term shift to digitally enabled experiences is stimulating investment across enterprise segments in areas such as the expansion of fibre networks and the increase in data centre capacity, alongside an emerging spotlight on the metaverse and its associated technologies, including augmented reality, virtual reality, non-fungible tokens and digital content.
‘Despite unprecedented levels of TMT deal activity over the past year, we believe there is still significant upside across sectors from continued digital disruption. Recent global conditions bring new uncertainty but also enable new opportunities for thoughtful investors.’
We expect investor interest in TMT deals to remain strong due to the demand for digital transformation, technology, cloud computing and data-driven capabilities, which are integral to the success of companies’ growth strategies.
Technology and the pace of innovation are moving fast. Although we are seeing volatility and growing uncertainty in the market, we believe there’s plenty of opportunity remaining for companies to embrace the role technology will play in their future—and this, in turn, will create a healthy level of M&A activity over the coming months.