The Technology Services Perspective – FY 2021

Mark Williams, Albert Kouzminski

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.