Mergers & Acquisitions

Learn More

Private Capital Raises

Learn More

Market Assessments & Valuations

Learn More

Business Services & Technology

Learn More

Industrial Services & Technology

Learn More

Healthcare and Life Sciences

Learn More

Consumer Services & Technology

Learn More

International Markets

Learn More

Insurance Services & Technology

Learn More

Quarterly Reports

Learn More


Learn More


Learn More


Learn More
Deal Talk with 7MA

Your resource for invaluable insight into investment banking and the M&A space.

Learn More
Deal Us In

Conversation with women leaders and rising stars in the private equity and finance space.

Learn More

Technology & Business Services M&A in 2021: Is the M&A Market Still Hot?

November 12, 2021

How has the IT Services sector fared in M&A activity over the last 18 months?

On this episode of Deal Talk with 7MA — part of a series recorded during the ACCESS 2021 Conference Hosted by 7 Mile Advisors — Partner John Cooper provides an update on the M&A landscape. He walks us through how 7MA sees the M&A landscape including general market trends, commentary from the firm, target markets, and Q&A from the audience. View the accompanying presentation here.

7MA has closed 29 deals since October of 2020 with another 10 deals under LOI. Alongside positive deal stats, they are also hiring aggressively in response to the strong market.

Over the last number of years, key international players have made aggressive M&A moves around the Technology sector. Those in the private equity market are also looking to make strategic moves to deploy capital in the Tech sector, as it’s viewed as an attractive and growing space.

In regards to market trends, the IT sector (including software, digital technology, global SI’s, management consultancies, and digital marketing) has been trading at all-time highs.

Enterprise software is reporting double-digit revenue multiples and digital technology companies are trading at multiple historically found by software companies. These technology gains have since cooled off a bit as people’s perspectives have changed causing a bit of back and forth volatility, but overall strong gains for the sector as a whole.

While private equity investors may approach deals with more caution and heightened standards, they’re not avoiding IT. We’re seeing some companies in the Enterprise Software and Digital Tech Services categories trading at all-time highs. Deal activity with IT companies have accelerated — comprising 22% of all deals done in 2021.

The support and interest in the IT sector reflect the role tech is playing in the workplace including businesses trying to be more creative in terms of remote employees, a push to stay connected with the brand’s consumer journey, optimizing marketing channels, and the need to utilize CRM data to remain competitive in the marketplace.

North America as a whole has seen strong M&A activity. The expectation is that we will see a very strong Q4 to close out a strong year of M&A activity in terms of deal count and deal value. Deal values have been on a downward trend since 2018, this trend was reflected in 2019 and 2020, however, 2021 shows a strong rebound. Megadeals and SPAC activity have helped drive the 2021 rebound by driving additional M&A funding through these channels.

As we close out 2021, John explains that he doesn’t predict an immediate slowdown in the market. There is a continued need for data, IT, SaaS, and technology services that will continue to power M&A. There is already some pent-up demand that will carry into 2022 from deals that are ready to go to market and he predicts that the current momentum will continue.

John also responded to questions from attendees, including:

💡 Featured Guest 💡

Name: John Cooper

What he does: John is a Partner at 7 Mile Advisors with more than 15 years of financial experience. He joined the firm from NewMarket Corporation where he worked in the corporate finance team and BB&T Capital Markets as an equity research analyst.

Organization: 7 Mile Advisors

Words of wisdom:  “We’re expecting a really strong Q4 to round out what will be a very strong year of M&A activity both from a deal count perspective, as well as a deal value [perspective].”

Connect: LinkedIn

🗝️ Key Points 🗝️

Top takeaways from this episode

★    2021 has been a busy year for M&A. 2021 is ending on a strong note for M&A after limited deal activity over the last three years. Investors and private equity groups have been eager to spend after a hesitant 2020. IT has comprised 22% of all deals so far this year — a rise from an average of about 16% in previous years.

★    Revenue multiples for IT services have increased. Buzzwords like “digital transformation” started picking up around 2015, which has pushed M&A activity in the IT Services sector on an upward trajectory. IT services firms have also diversified revenue streams and focused more on recurring revenue, which has driven up the value.

Driving up valuation in a crowded market. For sellers looking to take advantage of the active M&A climate, positioning a business as one that can drive assets at scale is something that will appeal to buyers along with strong revenue growth.

⚡ Episode Insights ⚡

[4:28] Recent deal environment: 7MA has closed 29 deals since October 2020 and has another 10 under LOI. “We’ve been hiring aggressively too [and] it’s been a great market,” John says of the current deal climate.

[5:02] Acquisition activity: John notes some recent acquisitions like digital engineering company Real Sourcing’s acquisition of Centare, a digital business and technology consultancy.

[8:32] A bumper year: 2021 is ending on a strong note for M&A after limited deal activity over the last three years. Investors and private equity groups have been eager to spend after a hesitant 2020. IT has comprised 22% of all deals so far this year — a rise from around 16%, John notes.

[11:31] Revenue multiples: While EBITDA can fluctuate depending on the data publicly available, multiples offer a more consistent metric. The data show revenue multiples are up and it’s driven by creative revenue streams, including recurring revenue.

[14:54] SaaS limitations: SaaS deals are still getting done, but companies often require custom developed solutions to sustainably solve business problems.

[17:36] Target markets and multiples: John highlights historical trends with gross margins, noting that pure service companies are typically around 35% from a gross margin perspective.

[20:32] What to shop for: John discusses why growth is so attractive in M&A. “That is gold star number one, like what to shop for — we want revenue growth,” he says.

[23:28] Outlook for the next 12 months: M&A activity will continue at an accelerated pace and John expects a lot of deals to be announced between Thanksgiving and the beginning of 2022.

[24:58] Thinking about valuation: John outlines how potential sellers can think about positioning their company for acquisition in a competitive market.

Connect with 7 Mile Advisors

☑️ Follow us on Twitter & LinkedIn.

☑️ Subscribe to Deal Talk with 7MA on Apple Podcasts, Stitcher, TuneIn, Spotify, or Google Podcasts.

☑️ Let us know what topics you would like to hear about on Deal Talk with 7MA by emailing us at


Deal Talk with 7MA, a bi-weekly podcast by 7 Mile Advisors that aims to give listeners a look behind the curtain of the middle-market Mergers & Acquisitions world. 7 Mile Advisors is a middle-market M&A firm based out of Charlotte, NC, that provides investment banking services and advice on mergers, acquisitions, and private capital transactions around the globe.


Don't have a login? Create an account