Software and technology M&A insights: Q3-2017

Residing at the epicenter of disruption, technological innovation continues to alter the way businesses operate and compete within today’s increasingly competitive landscape. With the advent of new technology, industry participants are progressively challenging existing advancements and pioneering innovative tools that drive robust results for their end-users. As the technology sector continues to evolve at a rapid pace, companies across virtually all industries are acknowledging that they cannot afford to ignore the impact of technology.

Considered by most to be industry and size agnostic, the value proposition linked to modern-day technology continues to strengthen and is evidenced by the growing number of operators and end users. From the perspective of a potential buyer, the selection process can be challenging as there is no shortage of options in the marketplace.  Understanding which option best fits a company’s operational structure and underlying business model as well as knowing how to achieve seamless integration is critical. Accessing technology is not always as simple as it may seem. While executive teams contemplate tech strategy, many businesses struggle to answer the question, “Do we buy or do we build it ourselves?”

As the technology innovation cycle matures, the impact technology is having on legacy business models could not be more clear, and most businesses are realigning their operations to accommodate digital transformation trends. Protecting core products and business lines in a rapidly changing technology landscape will remain a top priority for executive teams and as a result, the technology sector has become a key catalyst driving M&A activity across all industries.

“It’s better to acquire disruptive technology than be disrupted by that technology.”

Whether looking to increase operational efficiencies, establish a competitive advantage or secure new technology-enabled competencies, acquiring technology has become the preferential path toward inorganic growth. Technology is not a core competency for most companies and in order to close innovation gaps, non-technology businesses have elected to bypass internal research and development (R&D) and pursue technology M&A opportunities.

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