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PwC: Strong Start to 2014 Technology M&A

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PwC: Strong Start to 2014 Technology M&A

Software and internet remain at forefront of 2014 deal-making.

Technology deals for the first quarter of 2014 started strong, continuing the momentum of the second-half surge of 2013, according to a recently released report from professional services firm PwC.  Equity markets remained near record highs and IPO activity remained robust in an improving economy. Software and Internet deals continue to dominate as cloud, mobile and data drive much of the industry focus today.

In the first quarter of 2014, the report found that technology sector transaction volume remained on par with the fourth quarter of 2013 with 57 deals closed for a total of $22.6 billion. Compared to the slower first quarter of 2013, transaction activity grew substantially with volume up 36% and value more than doubling at 113%. There were seven deals in excess of $1 billion in the first quarter, compared to an average of four to five per quarter during 2013.

"Transaction activity grew substantially with volume up 36% and value more than doubling at 113%."

"With a stellar start to 2014, the first quarter saw more billion dollar transactions making headlines as the technology sector deal market continues to thrive amid rapid change and improving economic global conditions," said Rob Fisher, PwC's U.S. technology industry deals leader.  "With software embedded in virtually everything, software and Internet sector deal activity continues to flourish, offsetting declines in other subsectors. Looking ahead, we expect a robust outlook for technology deals tempered only by valuation pressures from IPO alternatives and overall competition for quality assets."

According to the report, 13 technology IPOs occurred in the first quarter of 2014 with total proceeds exceeding $1.9 billion. Technology IPO average one-day returns neared 34%, and current year-to-date returns averaged 12%, both surpassing the overall growth of 2014 market indices. Publicly announced IPO registrations filings totalled 24 for the quarter with additional registrations filed confidentially under the rules of the US JOBS Act.

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