IT mergers and acquisitions are set to skyrocket.
The global value of publicly disclosed technology-related mergers and acquisitions was $396.4 billion in October, according to a report by Ernst & Young. M&A in the industry is on track to beat the 2000 record M&A value of $412.4 billion.
Some 45 percent of the executives surveyed said that they planned to actively pursue acquisitions in the next year, and 80 percent predicted global M&A will flourish in 2016.
October was the most profitable month of the year for tech company buyers, IT World reported. The largest deals were the $67 million purchase of EMC by Dell and the $19 billion acquisition of SanDisk by Western Digital.
The growing use of mobile, cloud and big data technologies in business is spurring the increase in M&A, IT World reported. Network systems and storage hardware are combining, and mobile devices are changing the ways software and applications are developed. With all the changes, innovative tech companies that can bring business systems up to date are in high demand.
“While digital disruption is not a new story, we have clearly entered a new chapter in its impact on M&A,” said Ernst & Young global technology industry leader Jeff Liu.
A record 1,069 publicly disclosed mergers and acquisitions were made in the third quarter of 2015, marking the seventh consecutive post-dot com bubble record for technology deal volume, according to IT World.
Partially driving the boom is a growing number of IT businesses buying non-tech companies, the source reported, citing IBM’s acquisition of assets from the Weather Company for its Watson platforms. More traditional industrial companies are also buying IT companies to strengthen their analytics and improve profit margins.