Tech sector M&A to stay strong despite crunch -PwC

LONDON, April 21 Mon Apr 21, 2008 10:35am EDT

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LONDON, April 21 (Reuters) - Merger and acquisition activity in the technology sector will likely remain strong despite the credit crunch and downturn in M&A generally, a report by consultancy PricewaterhouseCoopers found on Monday.

The high proportion of mid-market deals in the sector is likely to allow buyout firms -- whose ability to borrow is less limited in that segment than on larger deals -- to continue to acquire technology companies, the firm said.

Companies are also likely to undertake strategic deals, it said.

"Current activity levels and deal pipelines suggest strategic and transformational deals are still very much on the boardroom agenda of technology companies, and the demise of the leveraged buyout has been overplayed in the sector," said PwC in a statement.

The report comes after global M&A activity tumbled by a third, as buyout firms found it difficult to fund transactions and volatile markets made companies nervous about undertaking large cross-border deals in Europe and the U.S.

Increased activity in regions such as Asia, more isolated from the credit crunch, will help keep deals flowing, said PwC, which advises on M&A deals primarily valued between 50 million pounds ($99.4 million) and 250 million.

"It would be surprising if 2007 value levels were repeated in 2008, however the tougher environment will likely provide significant opportunities for those with the financial capacity, strength of commercial rationale and execution skills to deliver," Andy Morgan, technology sector leader at PwC, said. (Reporting by Mathieu Robbins; Editing by David Hulmes) (mathieu.robbins@reuterts.com; +44 20 7542 8864; Reuters Messaging: mathieu.robbins.reuters.com@reuters.net)) ($1=.5028 Pound)

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