Download PDFJanuary 2023
Marketing Update: Digital Engineering Q4 2022
Due to growing strategic and private equity interest in digital engineering companies, market activity in the fourth quarter remains high relative to general market activity. While traditional market leaders in the sector actively continue to pursue large opportunities to expand their market position, private equity investors are becoming increasingly aggressive at investing in and scaling digital engineering businesses. According to Zinnov, a global strategy firm, the emergence of newer digital skillsets and economically resilient business models have made digital engineering firms an attractive investment for private equity firms. In November, Ness Digital Engineering, a New Jersey-based digital consultancy with more than 4,000 employees, was acquired by KKR, a leading global investment firm with more than $500 billion in assets under management.
The required investment in digital engineering projects is pervasive across all industries. Companies are readily adopting new digital technologies in day-to-day operations that require increased spend toward the development of new and existing capabilities. According to an August report from Digital Engineering 24/7 Partners, the global market for software engineering services is expected to grow from $32.6 billion in 2022 to $50.2 billion by 2026, growing at a compound annual growth rate of 9.7 percent.
Globally, firms continue to make digital engineering acquisitions to expand delivery capabilities and accelerate inorganic growth. Recently, GlobalLogic, a Romania-based software engineering services company, acquired Fortech to support its multi-year growth strategy. Sopra Steria, a Belgian-based digital consultancy, acquired Tobania to establish a leading position in the Belgian digital services market.
7MA has recently completed numerous M&A transactions for Digital Engineering companies and has developed unparalleled deal expertise and knowledge of the industry trends, valuations trends, and most active strategic and financial buyers. Please contact Leroy Davis, Tripp Davis, Kristina Sergueeva, or Ilia Ulianchuk if you would like to learn more about 7MA’s Digital Engineering practice.
