84% of Private Equity backers of UK ICT firms plan to make new technology aquisitions in 2010
Friday, February 26, 2010
| Posted by: Grant Thornton
| Tags: technology,
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Simon Davies,
Himanshu Raja,
Ash Hussain,
Corporate Finance,
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Martin Rowland,
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UK firms specialised in Information and Communication Technologies (ICT) continue to attract private equity investors, according to our recent ‘Where is the Smart Money Going in ICT?’ report. The survey of the 40 leading private equity investors backing UK ICT firms recorded 84% as saying that their firm planned to undertake an acquisition in the UK ICT sector over the next 12 months.
Watch footage of our panellists share their views on the findings of the report and the state of the market by Himanshu Raja (CFO BT Design), Ash Hussain (Axial Systems), Martin Rowland (LDC) and Simon Davies (Grant Thornton Corporate Finance Advisory).
“Our survey indicates that there will be stiff competition for quality ICT assets in the coming months. 72% of existing private equity backers of ICT expect an overall increase in investments in the sector and an increasing number of private equity houses are looking to move into the ICT space,” commented Wendy Hart, Corporate Finance Advisory Partner at Grant Thornton.
90% of respondents believe the most likely exit strategy in the coming months will be a sale to a trade player.
“In terms of exits for private equity houses, the sterling/dollar exchange rate and the relative speed with which the US appears to be coming out of recession suggests that there will be continued appetite from the US for UK acquisitions,” said Wendy Hart.
89% of the private equity houses surveyed identified the cloud computing and Software as a Service (SaaS) space as the most attractive investment location within the ICT sector in the coming 12 months.
“Our survey shows that cloud computing and Software as a Service provide the most attractive investment opportunities within ICT. These services are benefiting from cost cutting measures where businesses shift from acquiring software to acquiring licenses for applications as a service on demand,” added Niki Dixon, Head of Technology at Grant Thornton.
39% of respondents also cited the green IT niche as an attractive investment location for private equity buyers this year.
“I don’t think the opportunities provided by the green IT niche have been fully recognised. As computing capacity and the use of mobile devices increases, we are likely to see increasing government support for emerging technologies such as optical computing, the development of solid state drive technologies and a broad range of solutions to improve operational efficiency,” argued Niki Dixon.
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