Cyber security became a top priority for CEOs and world leaders in 2021, fuelled by a rise in nation-state attacks and ransomware. An evolving cyber threat landscape coupled with a growing skills shortage in the sector has required organisations to urgently invest and scale their security systems and processes.

The CyberScope

2021 finished strongly with 183 transactions, with Q4 representing an unparalleled $29Bn in disclosed deal value – the highest quarterly deal value in the ten years we have tracked this market.

CG Results advised on four security transactions in 2021: Tenzing’s investment into MetaCompliance (security awareness), Outpost 24’s acquisition of BlueLiv (threat intelligence), Livingbridge’s investment in Quorum Cyber (managed detection and response) and the sale of Redstor to Bregal Milestone (cloud data management and protection).

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A sustained demand for AI and data-driven technologies in 2021 ensured both private and public markets were increasingly active and drove more M&A activity in the Enterprise Software sector than ever before.

The year rounded off on a high with total disclosed deal values in Q4 reaching close to $100Bn with CG Results having completed seven enterprise software transactions in the last twelve months.

The need to drive enterprise protection, solve global supply chain challenges and strengthen digital and multi-cloud capabilities drove investors to pay premium multiples for both innovative startups and dominant incumbents.

CG Results’ public SaaS index shows a strong median valuation at 15.1x revenue and 27.4x EBITDA. With valuations strong, and investors and acquirers now confident operating in a virtual environment we expect a continued surge in M&A and private equity activity as we enter 2022.

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Deal activity for 2021 has been strong – the acceleration of end-to-end digital transformation through the pandemic continued to drive M&A agendas. Premium valuations were commanded by businesses with high day rates for highly skilled resources with scarce availability, such as data science and cybersecurity.

Public market indices grew in line with the NASDAQ and were tracking c.14-40% higher than at the start of the year. Median EV/EBITDA multiples remained strong in Q4, largely trading in excess of 10x, whilst IT Consulting saw the largest expansion in the year to 17.1x.

M&A activity increased since Q1, but dropped slightly in Q4, driven by fewer infrastructure deals following a strong Q3, with a total of 701 deals this year. Notably, this year saw Asian HQ consultancies push aggressively into Europe and North America through big ticket M&A and a continued focus on emerging technologies and providing an end-to-end offering.

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Deal activity for 2021 has been strong – the acceleration of digital transformation at the onset of Covid-19 pandemic to drive enterprise protection, solve global supply chain challenges and strengthen multi-cloud capabilities drove investors to pay premium multiples for both innovative startups and dominant incumbents.

Public markets were increasingly active too as 2021 marked the strongest year for global IPO listings. The indices we track across sectors grew in line with NASDAQ with a strong median valuation compared to the trailing historical medians. The year also saw a record high in deal volumes across the globe with CG Results alone completing eleven transactions in the technology sector in last twelve months.

Valuation multiples are also consistently strong this quarter, resulting in several IPOs across the sectors we track, With valuations strong, and investors and acquirers now confident operating in a virtual environment we expect a continued surge in M&A and private equity activity as we enter 2022.

In our Global Technology Market Review, we analyse valuations, M&A activity and broader trends in the key technology markets of enterprise software, technology services and cybersecurity. We hope that you enjoy this report and look forward to discussing the data and underlying themes with you. If you are contemplating fundraising, exit or growth through acquisitions, please do get in touch.

Click to read Global Technology Market Review: FY 2021
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CONTENTS

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Technology Services Perspective
CyberScope
Enterprise Stack

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We are pleased to share with you the CDMO Market Update – November 2021, where we analyse global M&A activity and public market valuations in the CDMO sector.

H1 2021 was an exceptional start to the year with 48 deals in total in the CDMO sector, almost reaching the total annual transactions in the previous four years (~50 transactions p.a. 2017-2020).

Click to read CDMO Sector Update – November 2021

Q1 saw the highest level of deal activity recorded in any three-month period. This was partly driven by deal backlog unwinding and partly by increased acquirer interest in the sector.

Deal momentum has remained strong through the summer, and we do not expect to see a slowdown in M&A activity in the near term.

Covid-19 had a noticeable impact on deal activity in Q2 of 2020, as companies needed to focus on the challenge of keeping manufacturing sites operational with the added pressure of increased demand from global health systems which left no bandwidth for corporate development activities.

We hope that you enjoy this report and look forward to discussing the data and underlying themes with you. If you are contemplating an acquisition, a divestment or growth strategy, please do get in touch.

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We are pleased to share with you the Q3 2021 Marketing Services Sector Review, where we analyse global M&A activity and public market performance in the marketing services sector.

The M&A market for Marketing Services remains buoyant and dynamic with Q1-Q3 2021 deal volume up by 30% on the comparative period at 569 and 441 total deals respectively. We have tracked 200 deals in Q3 2021 which is the highest quarterly level of activity since Q1 2020.

Click to read Global Marketing Sector Review: Q1-Q3 2021

Private equity remains a driving force in the M&A environment through both direct investments and activity through portfolio companies. We see no signs of a slowdown from this cohort and note that six of the top 10 buyers in Q1-Q3 2021 were private equity.

Global indices and valuation multiples across the marcoms and consulting spaces continued to show positive performance in Q3 2021 reflecting organic growth in the sectors and ever-increasing global confidence as we emerge from challenging times.

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Deal activity this quarter continues to be driven by strong confidence in acquiring capability in next-gen, modernisation and cloud-first tech stacks, and premium services. Equally, capturing the end-to-end digital transformation value chain continues to be a key M&A theme to become the strategic operator and engineering partner of choice for large-scale budgets.

Public tech companies continue to track the NASDAQ’s trajectory over the past 12 months. Overall, indices are tracking c.20%-45% ahead of the share price in September 2020 and median EV/EBITDA multiples have remained strong in Q3, largely trading in excess of 10x.

Q3 finished strong with 209 M&A transactions, up 27% from Q2, with the application and infrastructure segments representing the bulk of M&A activity. Notably, this quarter saw remarkably more capability-focused tuck-in deals than significant multi-billion dollar transactions we have seen in other quarters.

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Following the COVID-19 pandemic, we continue to see more companies using applications deployed on the cloud and an increasing need for cloud security and zero-trust network access solutions. Expansion of attack surfaces, sophisticated ransomware attacks and publicised security incidents continue to accelerate demand for next-gen security and proactive risk management.

The CyberScope - Q3 2021

Q3 2021 finished strongly with 55 transactions in the cybersecurity sector, up 10% from Q2, and the highest quarterly total in the ten years we have tracked this market. We expect this strong momentum to continue for the duration of 2021.

This quarter, CG Results has acted as exclusive financial advisor to Outpost24, a Swedish-based provider of full-stack cyber assessment, on its acquisition of Blueliv, a cyber threat intelligence provider headquartered in Spain.

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Following a strong Q2, the path to recovery from the global pandemic is increasingly clear on account of re-opening economies, record-breaking stock markets and an abundant supply of cheap capital fueling investor appetite.

The Enterprise Stack - Q3 2021

Deal making surged in Q3 with volumes up more than 20% on Q2 2021. The quarter witnessed c.500 transactions to further accelerate the adoption of technology in the wake of Covid-19.

As has been the case for many quarters, private equity continues to dominate with Constellation Software being the only strategic to feature in our top 10 most acquisitive buyers in the last 12 months.

Valuation multiples are also consistently strong this quarter with SaaS businesses trading at a median of 16.8x revenue and 20.1x EBITDA in Q3 2021.

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