Price-to-sales (PSR) ratios for European TMT (technology, media, telecoms) acquisitions rose faster than price-to-earnings (PER) multiples on a three-month rolling average basis for the second quarter in succession, according to latest data from corporate finance firm Regent Partners. Indeed at 13x earnings, average PERs have been pretty much in decline since February, suggesting that buyers are putting more focus on acquiring to gain share rather than margin. Average PSRs rose to 1.6x, up from 1.5x in June.
Regent recorded 247 European TMT deals in June, slightly down on May. However, aggregate deal values jumped some 70% to $17bn, mainly on the back of Vodafone’s acquisition of Kabel Deutschland.
June was a fairly muted month for M&A in the UK software and IT services scene, with acquisition activity mainly confined to smaller players such as WANdisco, Rivo, Adapt, and Enables IT. Eligible TechMarketView subscription service clients can catch up with the UK software and IT services corporate activity scene every quarter in IndustryViews Corporate Activity.