As predicted, the developed confidence in virtual dealmaking, continued private equity dry powder and cash rich tech balance sheets have driven strong deal activity this quarter. Transactions have mainly focused on strategic tuck-ins that are centred around acquiring next-gen and nearshore capabilities, such as influencer-based social media marketing, customer experience consultancy and RPA. The first quarter of 2022 saw 237 M&A transactions, which represents an increase of 50% for customer engagement, 34% for application and 13% for infrastructure in Results’ tech service categories
Despite initial volatility, March showed early signs of market recovery and combining this with the anticipation of several hot tech IPOs in 2022, such as ServiceTitan, Mobileye and Databricks, we expect a robust market performance going forward. Public tech companies broadly tracked the NASDAQ and FTSE 100’s trajectory with some categories such as IT / Consulting, performing 16% above their share price in March 2021. On the back of a wave of digital transformation to virtual operating environments and next-gen technology, IT / Consulting Services (12.1x) and Data Service Providers (15.9x) continue to trade at double-digit EBITDA multiples on public markets