Will the tech acquisition spree continue?

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The year was off to a good start for technology acquisitions, according to data provided by PwC and Thomson Reuters. There were 486 U.S. tech deals announced in the first quarter, totaling $42.8 billion.

In terms of both number of deals and value of deals, it was the best start of the year for U.S. tech M&A since 2014. There were 28 percent more deals than the same period last year, although the total was just 2 percent higher in terms of value, meaning the average deal size was smaller.

Intel’s $15.4 billion purchase of Israeli auto technology company Mobileye was by far the largest deal, and is a part of a wave of acquisitions related to self-driving cars (GM bought Cruise Automotive for $1 billion to advance its autonomous driving technology almost exactly a year prior).

Cisco’s $3.7 billion purchase of AppDynamics was the second largest acquisition for the quarter; its terms were agreed to just days before a planned IPO. There also was the $2.4 billion acquisition of DigitalGlobe and the merger of Capitol Acquisition and Cision, also for $2.4 billion. There were seven deals that exceeded $1 billion.

Software was the most active sector for the quarter, totaling 227 deals. IT services came in second with 167 purchases.

Non-digital buyers made 143 technology acquisitions, as traditional businesses continue to turn to startups for innovation. This trend is generally expected to continue.

But there was some disappointment with cross-border acquisitions. “Deal activity from Asian-Pacific investors declined notably in Q1 2017, illustrating uncertainty in American markets due to the new administration,” according to the PwC report. A recent survey by law firm Morrison & Foerster similarly found that “M&A between the two largest economies in the world, the U.S. and China, is expected to be particularly difficult in the coming years.”

The challenge with Chinese buyers stems from “a combination of uncertainty introduced by Trump’s policies and restrictions imposed by Chinese authorities on outflow of capital from China,” said Robert Townsend, co-chair of Morrison & Foerster’s Global M&A Practice Group. But ample technology deal activity in the U.S. is expected to continue.

The second quarter has remained active, with PetSmart buying Chewy.com for a reported $3.35 billion, an e-commerce record. We’ve already seen a handful of e-commerce acquisitions, including RetailMeNot’s $630 million deal and IAC’s purchase of Angie’s List for $500 million. E-commerce is an “area that is likely to see renewed interest, particularly from their bricks and mortar counterparts,” said Todson Page, U.S. Technology Deals leader at PwC.

Other notable acquisitions for the present quarter include Oracle buying adtech’s Moat for a reported $850 million, Uber competitor Gett spending $200 million to buy upstart Juno and Aurea’s $462 million purchase of collaboration software Jive.

Morrison & Foerster, also known as MoFo, polled more than 150 investment bankers, M&A executives, venture capitalists and lawyers, and found that 52 percent expect that global technology deals will surpass last year; only 15 percent are anticipating a decline.

Page at PwC was similarly optimistic about the remaining year. “We absolutely expect the tech M&A momentum to continue,” he said. He is particularly bullish on the software category.

MoFo’s Townsend said that a lot of experts are forecasting consolidation in the security industry. “The increasing prevalence of cyber breaches and the extraordinary threat presented by state-sponsored actors in cyber breaches,” will lead to more acquisitions in the space, he predicted. MoFo is also expecting to see consolidation in the Internet of Things, artificial intelligence and big data categories.

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