Market Update: IT Services & Software in Western Europe Q1 2022
The first quarter of 2022 was inaugurated by a decrease of 42.3% in terms of Western European M&A deal count activity. With a total of 142 completed transactions, Q1 was characterized by a rising 5.1% cost of living in the 19-nation currency bloc indicating that underlying inflationary pressures continue to build. In an effort to combat rapid price rises, the Bank of England (BoE) and the Federal Reserve System (FED) raised interest rates. Higher interest rates translate to less efficient LBO acquisitions since the cost of debt is higher. Thus, corporate/strategic buyers are gaining a competitive advantage over private equity groups and are gaining traction in the Western European M&A market.
Despite Q1 being marked by the conflict between Russia and Ukraine, Western European M&A activity remained active since Western Europe is now in the spotlight as many global buyers and investors turned away from Eastern Europe given the current political situation happening in that region.
Both top financial and strategic investors such as PWC, Endava, Intel, and Apax Partner remain highly interested in expanding their Western European footprint focusing on trending verticals such as SaaS, Cybersecurity, Managed Services, and Big Data.
7MA has completed numerous M&A transactions for companies with outsourced operations and/or delivery centers in western Europe and has developed unparalleled deal expertise and knowledge of the industry trends, valuation trends, and most active strategic and financial buyers. Please contact Kristina Sergueeva, Ilia Ulianchuk, or Lucas Cerbelli if you would like to learn more about IT Services & Software across western Europe.