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On 21 October global consulting firm Deloitte revealed it had acquired Australian Oracle partner Magia Solutions for an undisclosed sum.
On 12 October PricewaterhouseCoopers (PwC) Australia said it had strengthened its cyber security capabilities after striking a deal to acquire Sydney-based information security and risk management provider WebSecure Technologies Australia.
Just a day earlier, Perth-based Microsoft partner Lindentech acquired web design and marketing business Spinoff Digital.
The week before, on 7 October, it was revealed that Deloitte had inked a deal to acquire Canberra’s Sliced Tech, with CEO Jason McClure to become a Deloitte Consulting partner and its 40-strong team will join the global systems integrator by the end of the year.
While Lindentech’s acquisition may not have been quite on the same scale as PwC or Deloitte’s deals, the purchases are representative of a broader trend sweeping the Australian marketplace, with seemingly ever-increasing levels of mergers and acquisitions (M&A) activity in the local tech sector.
In fact, the surge in M&A deals in Australia isn’t restricted to the IT sector alone. According to Neil McMurchy, growth strategies research vice president for analyst firm Gartner, there has been a general increase in such activity across industries.
That said, the tech sector does seem to be getting more than its fair share of deals.
“The investors that drive this are particularly happy with tech,” McMurchy told ARN. “Tech makes money, and one of the clear messages out of COVID is that even conservative companies have said, ‘we need to understand tech, we need to use it.’”
Credit: Supplied The same trend can be seen across the Tasman, in New Zealand, where the prevalence of easy, and relatively inexpensive, financial capital is driving the M&A surge.
In fact, the effects of historically low interest rates can be seen across the globe, with a broad uptick in M&A activity in many regions around the world, including Australia.
“It’s not just an Australian or a New Zealand issue, there is bucket loads of money floating around,” McMurchy said.
And while a brief slowdown caused by delays in acquisition deals last year due to uncertainty around COVID-19 is seeing things ramp up again this year, the trend is mostly a continuation of an acceleration that has been going on over the past four or five years, according to McMurchy.
Beyond the broad stroke increase in M&A activity across various industry globally, it turns out that local tech players typically possess a few special traits that help to make them particularly appealing acquisition targets for large multinational buyers.
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