The European IT Services industry: 2013 M&A Report

298 transactions from 2013 with European target companies from the fields of IT Services and the segments IT Consulting [&] Engineering, Digital Agencies ad IT Infrastructure services has been analysed.

In 2013, there has been a lot of M[&]A activity with 298 completed transactions. The transaction rationale was complex and a range from consolidation to Indian large-scale enterprises finally “buying” access to European markets could be observed.

Above all, the segment IT Consulting showed a lot of activity: Recently, it almost seemed as if everyone talked to everyone. The high number of buyers taking the initiative was remarkable, e.g. the traditionally M[&]A-affine French consulting [&] engineering service providers like Alten and Altran; the US-American consultants like Accenture or Private Equity players like JP Morgan’s subsidiary One Equity Partner, Aurelius and Axcel from Denmark. The typical “head of the household”-mentality of German SMEs often does not fit the market dynamics triggered by the M[&]A process.

The market segment Digital Agencies has been very lively, too. For some time now, a melting together of Creative Agencies and Advertising Networks like Publicis and WPP on the one side and IT Consulting on the other side is taking place. From a technological perspective, this step has long been overdue – and even in fashion nerd glasses have become fashion for creative people. Even though the picture is quite positive, fears of contact still remain in M[&]A practice. These fears slowly diminish due to transactions completed.

The outlook for 2014 is – subject to a stable development of the economy of the euro zone, positive for all segments. Above all, the growth and consolidation strategies that have already been pursued in 2013, will lead to a continuously high number of transactions. Near- and offshoring as well as pioneering acquisitions from related industries, like the acquisition of hybris by SAP in June 2013, will further promote this trend.