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Mergermarket: U.S. TMT M&A Down in Q1

Deal volumes and values in the U.S. Technology, Media and Telecom (TMT) M&A market plunged 25.6% in the first quarter according to Mergermarket, which the researcher said could be a sign that the record deal pace of the past two years may have hit its peak.

According to Mergermarket, 241 deals were announced domestically in the first quarter valued at $26.1 billion, 25.6% down from the 249 deals valued at $35.2 billion in the prior years.

Mergermarklet said it was the lowest quarterly value since Q2 2012 (241 deals, $26 billion) and comes after a strong fourth quarter that included mega deals like AT&T’s pending $108.7 billion purchase of Time Warner Inc. and CenturyLink’s $34.5 billion purchase of Level 3. In the first quarter, the biggest U.S.  M&A deal in the sector was Cisco’s $3.7 billion acquisition of application intelligence software firm AppDynamics.

The deal market was only slightly better globally, according to Mergermarket. In its report, the researcher said global M&A was down 17.6% in the first quarter, to 634 deals worth $73.2 billion from last year’s 695 deals worth $88.8 billion.

“The slowdown would suggest M&A activity targeting TMT, which hit all-time highs in 2015 and 2016, has passed its peak as buyers back away from record valuations and consolidation in multiple industries to Mergermarket intelligence,” the report stated. “The sector accounted for 11% of global M&A activity, down from 21% during the whole of 2016.”