Whilst global M&A deal volumes have inevitably suffered in the first half of this year, commentators express some optimism for the second half. This optimism is perhaps felt most strongly for well prepared and capitalized buyers in the technology sector and especially for target businesses which have experienced a demand surge during the pandemic such as those focusing on eCommerce, payments, video conferencing, gaming and cloud computing as well as technologies which are reshaping other re-emerging sectors such as food delivery and mobile technology. This demand surge has been reflected in a continued strong volume of M&A deals in the technology sector with disclosed deal values of over $10 billion being reported between March 1 and June 30 of this year. Many larger listed technology companies have taken advantage of strong stock prices and available cash to make acquisitions, with some of the West Coast “BigTech” companies announcing a number of deals during that period.
As some countries and states in the US start to pursue an unlock strategy, this briefing reflects on some of the issues and practices relevant to M&A deals which emerged whilst the early effects of the pandemic were felt and considers the likelihood of changed market practices going forward for those pursuing an M&A strategy in the technology space. Of course, there are other macro factors beyond the COVID-19 pandemic which will continue to be influential on deal activity and practice in this sector, including the drive to digitization, tariff and sanction tensions as well as increasing political, regulatory and fiscal scrutiny of the technology sector. All of these factors will inevitably increase the complexity of multi-jurisdictional deals and domestic deals with foreign acquirers.