Technology initial public offerings (IPOs) continued to remain a key market driver and reached their highest levels since the dot com era, according to PwC’s US Technology Deals Insights 2014 Year in Review and 2015 Outlook report.
Even excluding the single largest IPO, valued at nearly $22 billion, IPO value increased 40 percent and volume increased 18 percent over 2013.
In total, there were 60 technology IPOs, an increase over the 51 posted in 2013, making 2014 the most active year since 2000.
“We continue to see real substance behind the companies being funded,” Rob Fisher, PwC’s U.S. technology deals leader, told eWEEK. “We’re also seeing that companies are going global much sooner than they have in the past, and this takes money to hire people – going global doesn’t happen overnight.”
The cumulative technology deal value for mergers and acquisitions (M&A) for 2014 closed at $161.4 billion, a 62 percent increase over 2013, which had a total deal value of $99.8 billion, while the average deal value grew to $583 million, compared to $489 million in 2013.
Total deal volume increased 36 percent, with 277 deals taking place by the end of 2014, compared to 204 in 2013. The fourth quarter of 2014 had both the highest number of deals for the year at 76, and nearly half of the announced deal value for the year at $74.9 billion.
The report also found 2014 was a record year for the Internet sector with $49.7 billion in deal value, a massive 415 percent increase compared to $9.7 billion in 2013.
“IoT technologies are very important, highly expansive, and [provide] plenty of room for growth,” Fisher said. “I think the report speaks to that and its pervasive impact across software, hardware, and semiconductor as the number of IoT devices is rapidly expanding.”
The number of deals rose by 153 percent, from 30 deals in 2013 to 76 deals in 2014, a similar level to that of the 71 deals in 2011.
Even excluding the outlying $22 billion deal, closed deal value for the Internet sector still reached a high of $27.7 billion.
Semiconductors were the only sector to show a decline in deal volume during 2014, with volume receding 15 percent to 28 deals.
However, deal value actually increased 62 percent to $17.4 billion, compared to $10.7 billion in 2013.
According to the report, undisclosed value transactions continue to play a significant role, with software leading the way.
Technology companies engaged in 1,289 undisclosed deals in 2014, a 10 percent increase from 1,168 in 2013.
“New and exciting technologies such as virtual reality, robots and drones that have captured the imagination of investors are making their way into both consumer and enterprise markets, and 2015 promises to be another active and exciting year for technology M&A,” Fisher said. “As new and established players invest in these innovations, large technology firms are expected to continue to rely on M&A to ensure that their portfolio is competitive.”
