Latest report on business sale transactions in telco and technology – late 2017
Definition
Technology covers everything from the development of hardware and peripherals to the rapid growth sectors of software and application development, online sales and computer security.
Valuation Issues
A business valuation reviews the size, timing and predictability of future cash flows. Within technology industries, a valuation would consider the following:
Opportunities
- The “internet of things” where everyday objects have network connectivity, allowing them to send and receive data.
- As network speeds increase, number of devices and device interconnectivity increases , significant opportunities to expand in data intensive areas such as video and smart home / office capabilities.
- Any entrepreneurial tech businesses that are able to develop or capitalise on IP in the online security or payment space.
Challenges
- Several components of the technology space have become commoditised and have become increasingly difficult to create any meaningful profitability or long term growth. This includes: web design and development, technology wholesale and technology retail.
2016 Transactions
Globally in 2016, transaction volumes have increased for internet services and software, decreased in hardware and electronics.
So far in 2016, around 35 midmarket deals in the technology space have been finalised, for a total of AU$738.36M.
The year started with Microsoft’s acquisition of Event Zero- they acquired their UC Commander product suite for the purpose of integration into its Skype for Business Services. Australia’s own behemoth, Atlassian also was on the acquisition trail, purchasing USA based company StatusPage providing real time web user notifications on service disruptions.
Acquisitions were made in the software space for companies such as Superconcepts (accounting) and MYOB (ERP), but there were greater volumes in SaaS including Australian based Aconex acquisition of German based Conject for A$96m in the construction SaaS market.
Gaming continued to generate acquisitions with Tabcorp acquiring gaming machine monitoring business Intecq for $128M. ASX listed game developer Animoco Brands used capital raised from its listing to acquire Finnish gaming business TicBits, and Sydney based international payments organisation Banktech acquired Global Gaming Industries (GGI)
There were several online services acquisitions including domain name service registers InfoReady by Melbourne IT for $15M, NZ based GeoOps mobile sales application acquisition of Interface IT, and online portal acquisitions by Silver Chef in the hospitality space and CV Check in the resume space.