Berkery Noyes Sees Sunny M&A Outlook – But US Election Adds Unpredictability

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Venture capital and early-stage tech investments may be harder to come by, but M&A exits across the mobile and online industry are still heating up, investment bank Berkery Noyes reported Tuesday.

The overall number of deals in 2016 ticked up 1% from the year before, while the aggregate value of those transactions jumped 12% year over year.

That discrepancy comes from a couple of large deals, like Microsoft paying $26 billion for LinkedIn and the Chinese company Tencent scooping up mobile game publisher Supercell for $8.6 billion, said Vineet Asthana, Berkery Noyes’ managing director of online media and tech investments.

Those big deals absorb a lot of attention, but Asthana said he was particularly impressed by the steady growth and interest in mid-market tech and data companies.

Companies that once made investments to gather data now find themselves with an overabundance, and are snapping up analytics shops.

“What has become useful are these machine-learning algorithms and someone who can decipher the data in a logical way,” Asthana said.

Despite a mostly sunny forecast, some uncertainty threatens to undercut tech M&A.

“From an entrepreneurial standpoint, there’s a concern the market is at its peak,” Asthana said.

The concern isn’t due to weakness in the market so much as a confused, muddled future.

“All trends and predictions need to be thrown out after the election,” Asthana said with a laugh. “People don’t know what 2017 or 2018 will hold, so that hurts an entrepreneur who depends on an acquirer or investor with a long-term outlook.”

And while the future is murky, history is clear.

“Online and mobile companies have had an eight-year stretch that, historically, you just don’t see maintained for longer than six or seven years,” Asthana said. “So a market adjustment might be in order.”

 

 

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