M&A Momentum Continues in the UK and Europe

 

M&A activity in the tech sector continues to show strength in early 2022, with momentum carrying through from the previous year. Appetite for tech M&A remained high in the U.K. and Europe, even amidst a backdrop of higher inflation, geopolitical conflict, and supply chain challenges.

 

It is still an attractive time for many companies to prioritize M&A. Vast amounts of cash have accumulated for some acquirers during the pandemic, who are now ready to deploy strategically. Meanwhile, company leaders are eyeing the right opportunities to grow their businesses through acquisitions. Also helping matters is a loosening of gathering restrictions, which allows M&A professionals to choose either online or in-person meetings to help guide a smooth process.

 

Early M&A momentum in 2022 within Europe comes on the back of a record-breaking year for technology deals on a global scale. BDO reports that global technology deal values exceeded $1-trillion for the first time in 2021, up 60% from the previous year. 

 

Global accounting, tax, and consultancy firm BDO wrote in February 2022 that “the fundamentals in tech M&A remain very strong, so we see these positive trends continuing through 2022.”

 

BDO identifies two factors that will drive M&A activity in 2022: (1) continuing and ready access to affordable financing; and (2) growing appetite for technology across the economy and society.

 

BDO further adds: “We have seen an increase in the U.K. market of fast-growing niche B2B software providers disrupting old legacy tech or bringing tech applications to new sectors such as mobility and healthcare.”

 

A separate report from PwC is also bullish on technology acquisitions: “M&A activity in 2021 was fueled in large measure by intense demand for digital and data-driven assets, and we believe technology adaptation will remain a consistent pressure across all industries in 2022.”

 

The sentiment expressed by BDO seems to be in line with M&A activity at Volaris in 2022 so far. In the first quarter of 2022, Volaris has already made five deals in Europe and the U.K., including IMS in Switzerland, Inforap in Portugal, Cactus Utilities in Sweden, and Sunrise Software and Company Watch in the U.K. These new acquisitions build on momentum from 2021, when Volaris acquired 14 companies in the U.K. and Europe over the course of a record-breaking year.

 

An experienced acquirer like Volaris Group has a major advantage in the UK and European markets. With an already strong foothold in the region, Volaris M&A experts hold a deep understanding of regional and local conditions, such as issues related to competition or changing regulation. 

 

One such M&A expert is Executive Director Jesper Ulsted, who leads a European-based portfolio of companies at Volaris. His team is one of several within Volaris that is actively seeking businesses to acquire in Europe.

 

Currently, Ulsted’s portfolio is represented by the Nordics, German-speaking markets, and France. Ulsted’s team has recently hired staff to lead expansion in the U.K. and the Netherlands. Among the languages spoken on his team are Danish, German, French, Spanish, and English.

 

“The potential for finding companies in Europe is big, and the landscape is different from the U.S., where all the companies are concentrated in Silicon Valley,” says Ulsted. 

 

Compared to the U.S., Europe holds a greater diversity of languages and legislation in different countries. Ulsted says these factors tend to result in smaller software businesses being formed—and the Volaris value proposition has proven to be an extremely good match for those businesses. 

 

“Companies in Europe tend to like knowing that their brand will remain the same, and that their products continue to be developed, which is what we can promise at Volaris,” he says.