A record-breaking month of July saw M&A activity in the European TMT sector flourish. The number of transactions grew for a third consecutive month, while the aggregate deal value of $31.8 billion was the highest figure since July 2018, surpassing last month’s value of $26 billion.
The Price/Sales ratio increased from 1.39 to 1.46, while the Price/EBITDA increased from 10.9 to 12, its highest value since September 2017. This overall upward trend was also reflected in the FTSE TechMark index, which jumped to reach 3900 points for the first time. The EV/EBITDA stabilised at 10.5x.
European TMT M&A activity was back on track this month. Whilst the number of transactions showed a marginal increase, the aggregate deal value doubled to reach its highest value since July of last year, at $26 billion.
This upward trend was also reflected in the valuation multiples: Price/Sales ratio increased from 1.25 to 1.39, while the Price/EBITDA hit 10.9, its highest value so far in 2019.
After a bad slip in May, listed technology companies performed strongly once again and reached 6650 points (+4%), as illustrated by the TechMark index; while the EV/EBITDA ratio recovered.
May wasn’t a particularly good month for European TMT activity. Despite the number of transactions going up by 10%, the aggregate deal value fell to $13bn, the lowest figure since September of last year.
In terms of valuation multiples, the Price/Sales ratio decreased from 1.44 to 1.25 and the Price/EBITDA from 8.96 to 8.33, both multiples recording their minimum values of the past 12 months.
Listed technology companies didn’t perform well either and lost 3%, as illustrated by the UK TechMark index, while the EV/EBITDA ratio tumbled.
The downward trend continued this month, with European TMT M&A activity lower both in terms of deal value and number of transactions, with only one deal surpassing the $1 billion benchmark.
Price/EBITDA and Price/Sales ratios also decreased, from 9.5 to 9 and from 1.6 to 1.4 respectively, which meant that the ratios were both well below their average monthly figure of the past 12 months.
However, listed companies continued to perform strongly as the TechMark Index gained some momentum to reach just under 3620 points, up 3% from the previous month.