Tech mergers and acquisitions should remain brisk into 2022.
Rapid consolidation in the tech industry continued in the third quarter with a number of significant deals. Consider CDW, Proofpoint, McAfee, Accenture and more.
That’s according to the latest Corporate Finance Associates (CFA) quarterly report on M&A in the tech industry. CFA’s investment banking team reviewed the M&A activity of the largest technology services businesses and highlighted the key acquired technologies.
John Holland is the CFA’s managing director.
CFA’s John Holland
“There was an extraordinarily high volume of M&A transactions in [the third quarter of 2021,” he said. “The transactions involved many different types of IT services businesses and telecom services businesses. Specifically, there were a multitude of acquisitions of MSPs and MSSPs. Also, there were many acquisitions of cloud solutions companies. Here is a sample of some of the companies that acquired cloud solutions firms: Accenture, Capgemini, Evoque Data Center Solutions, IBM, Improving, Netrix and SoftwareOne.”
Cybersecurity M&A Heats Up
Among tech industry M&A, CFA observed acquisitions of the full spectrum of cybersecurity businesses, from large cybersecurity software companies to small MSSPs, Holland said.
“On the large side, private equity firm Thoma Bravo acquired Proofpoint, and private equity firm STG acquired McAfee’s enterprise business,” he said. “Also, Avast merged with NortonLifeLock. CDW acquired Tampa-based Focal Point, a cybersecurity solutions provider with roughly 230 employees. On the smaller side, MSSP Cerberus Cyber Sentinel executed its third acquisition of an MSSP since going public in 2020.”
The big accounting firms that provide IT consulting services have been acquiring cybersecurity companies, Holland said. They’re in a rush to grab market share and expertise in this high-growth space.
“[Last quarter], Deloitte acquired three cybersecurity companies, Accenture acquired a French MSSP, PwC’s global subsidiaries acquired two identity management/cybersecurity firms, and an international subsidiary of Ernst & Young acquired a cybersecurity solutions firm. Speaking of consultancies, the large consultancy Booz Allen Hamilton acquired Tracepoint, a cybersecurity digital forensics and incident response provider.”
Scroll through our slideshow for tech industry M&A highlights from the third quarter and a look ahead.
