Deal makers seemed reluctant to spend this month after a lavish summer. The aggregate deal value within the European TMT M&A landscape dropped by $10bn in September to reach $21.4bn, the lowest figure since May. However, the increasing number of deals (316, up by 18%) made up for the drop in total value and sustained a somewhat healthy market.
The multiples diverged once again, with the P/EBITDA ratio losing ground at 9.1 points, down from 9.8; while the P/SALES ratio recorded its 4th month of consecutive growth, up from 1.5 to 1.8.
The FTSE TechMark indices continued to rise steadily: The All-share index totalled 3886 points on the closing day, while the EV/EBITDA ratio reached a new high of 12.2 before stabilising at 12x.
August tends to be a quiet period for M&A and this month made no exception. The number of deals within the European TMT space was down to 259; however, the aggregate value stayed relatively constant at $ 31.3 bn, thanks largely to the mega deal between LSEG and Refinitiv.
Valuation multiples diverged: while the P/EBITDA multiple fell by 18%, from 12 to 9.8, the P/Sales ratio continued to climb up to reach 1.49, up from 1.46 last month.
The FTSE techMARK index continued to perform strongly, stabilising at 3800 points, and the EV/EBITDA jumped dramatically to reach 11.8x, its highest figure since May.
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.