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The Tech Report – 2018 Market Review

By Daniel Lee 16 Jan 2018

Welcome to the full year 2018 edition of The Tech Report – Results International’s 15th quarterly review of deal activity and valuation metrics for the technology sector covering: enterprise software, digital services, cybersecurity, marketing and eCommerce technologies, and healthtech. We are extremely positive about the technology sector in 2019 and this is reflected in our predictions for the year.

 

We have produced our view on the full year’s proceedings in a series of individual market reviews on:

 

Digital Horizon

CyberScope

HealthTech 

Enterprise Stack

 

MarTech Barometer

 

Review of 2018:

  • After a stellar 2017, 2018 M&A deal volume was up 12% and total spend increased from $65bn to $200bn+.
  • The ‘world’s most valuable public company’ moved between three tech giants: starting with Apple, before being supplanted by Microsoft and now Amazon.
  • There was widespread digital transformation across all aspects of the enterprise, and across traditionally offline or integrated sectors which continues to drive strong M&A activity as existing players and new entrants fill missing capabilities and compete to capture as much of clients’ digital transformation budget as possible.
  • Results International had a busy year, advising on nine software and digital services transactions in 2018 reflecting a number of key trends in 2018:
    • Cybersecurity continued to be an area of focus for corporates following a number of high profile breaches. Avecto, with its endpoint privilege management and MWR with its managed detection and response platform and high-end cyber services, were acquired by Francisco Partners-backed Bomgar and Helsinki-listed F-Secure respectively. Results advised the sellers on both transactions.
    • With digital transformation and cloud-based hosting representing hot topics for corporates, the associated services were in high demand. Results International advised digital services providers OCSL (acquired by Cancom), E2Y (acquired by Dimension Data) and Red Pixie (acquired by HPE) on their acquisitions.
    • Emerging automation technologies AI and RPA drove strong strategic and PE interest in 2018 and will continue to be exciting spaces in 2019. Results International advised Symphony Ventures, an RPA specialist consultancy, on its acquisition by SYKES, and global private equity house Baird Capital on its investment into AI platform Crisp Thinking.
    • As marketing clients required more agile and technologically driven services, the demand for agencies that provide this capability continued to grow. Results International advised on Kaplan on its acquisition by Accenture, and Brandwidth on its acquisition by Next 15
  • In 2019, the macro forces driving uncertainty in the public markets will likely continue, meaning companies could increasingly delay or cancel IPOs. In turn, this will boost activity in the private markets with M&A and fundraises an attractive alternative.
  • In 2019 we expect to see cloud-focused digital services and RPA activity to grow and for cybersecurity activity staying at historically high levels as CIO’s continue to invest in these areas.

We hope you enjoy the document, and please do get in touch if you would like to discuss any of the themes with us. We look forward to speaking with you soon.

Daniel Lee

Vice President

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