Report says private equity buyers hungry for ICT acquisitions

A report by Grant Thornton UK, the financial advisor firm, found that private investors continue to be attracted to information and communication technology (ICT) firms.

The firm carried out a survey of 40 leading private equity investors, 84 per cent of which said they planned to acquire a UK ICT firm in the coming 12 months.

In terms of the most attractive area within the ICT sector, 89 per cent of investors questioned said cloud computing and SaaS space was top of their list.

Grant Thornton’s corporate advisory partner, Wendy Hart, suggested that investors may have to fight it out for the best ICT firms. "our survey indicates that there will be stiff competition for quality ICT assets in the coming months. 72% of existing private equity backers of ICT expect an overall increase in investments in the sector and an increasing number of private equity houses are looking to move into the ICT space,” she said.

Hart continued that much of the attention may come from across the pond, "in terms of exits for private equity houses, the sterling/dollar exchange rate and the relative speed with which the US appears to be coming out of recession suggests that there will be continued appetite from the US for UK acquisitions."

Business brokers and corporate finance houses are currently lamenting the lack of medium to large telecommunications and technology businesses for sale. That's because by the end of 2009, the technology sector emerged as one of the healthiest, with many companies reporting strong performances - and expectations of better sales this year.

According to KPMG technology partner, Jonathan Stankler, "It would not be at all surprising to see the technology sector lead the way in driving forward M&A activity on a global basis. Equally, to the extent that the IPO pipeline materialises, technology companies are likely to feature strongly."

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