Technology M&A activity drives good returns for VCs

12 Oct 2004

Irish technology merger and acquisition (M&A) activity during the third quarter of 2004 accounted for €162m and good returns were secured for most venture capitalists from their investments in Spectel, Amphion and Alphamosaic as US technology firms continue to acquire the better European emerging technology companies, the latest M&A Tracker from Ion Equity reveals.

Overall M&A activity in the third quarter of 2004 was largely unchanged compared with the corresponding quarter last year in terms of total deal value. A total number of 43 deals resulted in some €1.57bn worth of M&A transactions during the quarter, down 40pc on the second quarter of this year. The second quarter, however, was marked by one major transaction: the €1.1bn acquisition of the Savoy Group by Quinlan Private.

At €162m, IT and telecoms activity represented approximately 10pc of deal value and 16pc of overall deal volume in the third quarter.

Key M&A transactions included Aphyra’s acquisition of Itsmobile for an undisclosed sum, Ceridian’s acquisition of ITS for an undisclosed sum, Avaya’s €85.7m acquisition of Spectel, Conexant’s €24.5m acquisition of Amphion, MBO’s acquisition of Ash Technologies for an undisclosed sum, BT’s acquisition of BIC Systems for €25m and Broadcom’s €27m buyout of ACT’s stake in Alphamosiac.

Commenting on overall investment activity in Ireland during the third quarter of 2003, Ion Equity director Joe Devine said: “The outlook for capital markets internationally remains uncertain due to continued oil price volatility coupled with the upcoming US presidential election.

“International trends suggest that this may be starting to deter some international companies from implementing acquisition strategies.

“Overall we believe that Ireland remains relatively well positioned to continue the trend of being a net acquirer of assets across many sectors in an active corporate market,” Devine concluded.

By John Kennedy