Technology Deals Top $22 Billion in First Quarter

For the quarter there were five technology IPOs, with $1.3 billion in proceeds, a noticeable decline over the first quarter of 2014.

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The first quarter of 2015 closed with 73 technology deals valued at a total of $22.3 billion, according to the PricewaterhouseCoopers (PwC) US Technology Deals Insights Q1 report.

Deals Insights is a quarterly analysis based on data for transactions with a disclosed deal value greater than $15 million. Data is provided by Thomson Reuters through December 31, 2014 and supplemented by additional independent research.

Information related to previous periods is updated periodically based on new data collected by Thomson Reuters for deals closed during previous periods but not reflected in previous data sets.

For the first quarter, there were five technology initial public offerings (IPOs), with $1.3 billion in proceeds, a noticeable decline over the first quarter of 2014, when there were 13 IPOs and an average of 15 IPOs per quarter throughout 2014.

Average deal value totaled $305 million, a 27 percent decrease from $415 million in the first quarter of last year, which was affected by the decline in megadeals, or those deals valued at more than $1 billion.

For the quarter, there were five megadeals that closed, a decrease from the average nine megadeals that occurred each quarter over the past 12 months.

Cross-border deal activity increased during the first quarter, with U.S. acquirers leading by way of investment in Europe, much which can be attributed to the strong U.S. economy and dollar, the report noted.

Divestitures exhibited a slight decline in the first quarter, but continued portfolio pruning is expected to contribute to a healthy level of divestitures throughout 2015, according to the report.

In addition, strategic buyers led the way in the new year while private equity remained active on both the buy and sell side.

The software sector remained the most active, with 26 transactions closing for an aggregate deal value of $3.5 billion.

Software M&A volume increased 13 percent, while deal value declined 85 percent over Q4 2014. The number of Internet deals declined 52 percent followed by an 87 percent decline in value compared to the previous quarter, which was skewed by a single large deal in 2014 valued at $22 billion.

Additionally, hardware fell to the lowest level since early 2013 as deal volume and values declined 36 percent and 89 percent, respectively, in Q1 2015.

"While some companies paused to realign their near-term goals with competitive market shifts, the top technology companies maintain tremendous war chests of cash in excess of $370 billion providing ample ammunition for strategic acquisitions for the remainder of 2015," the report noted.