Tech acquisitions hit $337bn high

The level of European technology merger and acquisitions hit a new high in 2006 - with more than 3,000 deals being done, totalling $337bn.

The Regent Associates quarterly European Technology Acquisition Review tracked 3,295 deals involving European technology companies worth a total of $337bn in 2006, compared to the 3,053 deals worth $272bn in 2005.

One of the trends in the 2006 figures is the return of the "super deal" - with seven deals having values in excess of $10bn. But despite the high activity levels the report says there is still no bubble, with the total M&A value still falling well short of the $764bn seen at the height of the dot-com boom in 2000.

Peter Rowell, chairman of Regent Associates, said in the report the current level of activity is being fuelled by the confident performance of the industry as a whole and the abundance of buyers - both trade and financial - with high levels of available cash.

He said: "2006 was a very active acquisition market for technology companies. Just as in 2005, the current activity is built on solid foundations with carefully thought-out strategic and financial metrics."

The UK retained its position as the most active buying region while the content and media sector overtook IT services for the number of transactions. In addition, the software sector saw a 26 per cent growth in acquisition activity on the previous year.

Rowell said: "Good profit levels in the industry are ensuring that successful companies are able to pursue an active acquisition strategy to supplement their organic growth. This, together with increased aggression from the cash-rich private equity community, means that we are seeing some interesting buyer tensions in the market."

The report predicts 2007 will be a good year for acquisitions without hitting the peak of 2006.