Technology
Deals Activity: Moderate
Restructuring Activity: Low
Deals activity in Technology
1. A significant surge in dealmaking during the pandemic has gradually slowed and is returning to pre-COVID levels.
2. Given the nature of the sector, regular deal activity is driven by investors seeking to exit their positions and larger firms consolidating underperforming start-ups.
3. Despite increased borrowing costs, we anticipate underlying fundamentals of tech businesses will continue to spur investment, acquisition and consolidation in the medium-term.
Restructuring activity in Technology
In light of slowing revenues, global tech giants have enacted a series of layoffs aimed at reducing overheads and increasing profitability.
New and proposed legislation, in the UK and elsewhere, aimed at improving privacy and safeguarding are also likely to increase operational and compliance costs.
Consolidation and closure of non-core operations are likely as technology business focus on profitability over growth.
Technology
In recent years, B2B technology projects have tended to be insulated from wider economic challenges. Investment in this area is expected to remain a major priority for many corporate customers, but non-essential capex will remain in focus.
There have been several high-profile implementation failures of new systems recently, resulting in customers being unable to process sales, reorder stock or pay staff correctly. In such a competitive landscape, these issues are likely to cause lasting reputational damage that may be difficult to restore.
Privacy, security and reliability concerns mean companies are being held to increasingly high operating standards. This may start to impact business models as cost bases change, particularly for technology companies interacting with consumers.
Find Your Expert
Mark Raddan is Interpath Lead for the Technology, Media and Telecommunications sector. Neil Speight leads our approach to Technology nationally. For a full list of our senior people with experience in the sector use the button below.
Our senior team
