IT & Business Services M&A Deal Volume Normalises After Record-Breaking Period But IT Spending Continues to Surge

The latest IT & Business Services M&A report from Hampleton Partners, the international M&A and corporate finance advisory firm for software and technology companies, reveals that the blistering activity seen in the sector in recent years has slowed, with 558 deals recorded within the sector in 1H2024. This is notably lower than what was recorded for 2H2023, and comes after a two-year period where IT & Business Services companies were acquired in record-breaking numbers.

While the subdued momentum can largely be attributed to continuing inflationary and geopolitical pressures impacting the tech industry as a whole, it may also represent a normalisation in deal activity following the boom which accompanied the worldwide digitalisation of workplaces – a phenomenon accelerated by the pandemic.

Meanwhile, worldwide IT spending is tipped to reach $5.26 trillion by the end of this year. This surge is partly being fuelled by the demand for generative AI services, with recent research revealing that the majority of global CTOs and CIOs are now leveraging AI within their departments to transform vital enterprise processes such as data analysis and staff training.

Commenting on the latest IT & Business Services sector data, Konstantin Kastius – Managing Director at Hampleton Partners – said: “There is good cause for optimism, with sky-high IT spending projections, and the continuing imperative for businesses to implement mission critical workflow solutions, suggesting it’s only a matter of time before the market turns bullish again.”

Accenture remains the most prolific IT & Business Services acquirer by some distance, with Pye-Barker and Upstack once again taking the second and third positions when it comes to the total deals made over the past 30 months:

• Accenture – 57 acquisitions, including SirfinPA (IT consulting services), Customer Management IT (systems management and IT consulting services), and Redkite Data Intelligence (data consulting services)
• Pye-Barker – 34 acquisitions, including Alarmguard Security (security and fire detection systems integrator), Sentry Watch (fire and security systems integrator), and S&S Sprinkler (fire and security systems integrator)
• Upstack – 20 acquisitions, including CA Communications Inc (IT integration services), Strategic Telecom Partners (telecommunications consulting services), and Progressive Communications Management (IT advisory services)

Download the full Hampleton Partners IT & Business Services M&A Market Report 2H2024, which discusses key industry trends and transaction case studies within the three main subsectors: IT Outsourced Services, Tech Services & Support, and Integration Services at https://www.hampletonpartners.com/reports/it-business-services-report/.

Hampleton Partners’ M&A Market Reports are compiled using data and information from the 451 Research database (www.451research.com); Capital IQ, CB Insights, Gartner, IDC and more.

Hampleton Partners advises technology company owners on M&A and growth financing transactions with strategic buyers or financial investors. Hampleton’s experienced deal makers have advised hundreds of tech industry shareholders and provide hands-on expertise and unrivalled advice to entrepreneurs looking to sell their companies, partially exit, or to accelerate growth.

With offices in London, Frankfurt, Stockholm and San Francisco, Hampleton offers a global perspective with sector expertise in: Enterprise Software, Digital Commerce, IT & Business Services, Artificial Intelligence, Autotech & Mobility, Cybersecurity, Fintech, Healthtech, HR Tech, and Insurtech.

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