M&As in the tech industry are at an interesting precipice right now. While just last year many analysts were expecting a record year following the boom of 2015, it looks like they’ve actually fallen in 2016. According to Mergemarket, a London-based company that tracks mergers, there has been a decline in technology, media and telecommunications deals, which is on the heels of six years of steady growth.
Based on the Mergemarket data, there were about 1.,363 deals completed in these sectors in the first half of 2016. That is a 41 percent drop as compared to value over the same period in 2015. It was the weakest first half deal value and count since 2013 according to the global tracking firm.
So what does this bad news mean for tech companies who are looking to sell? The following are some tips that can help would-be sellers in this industry navigate a difficult situation.
Focus on Talent
If you want to follow in the M&A strategy of a company like Google, consider where they put their focus: their people. There are a lot of things a buyer can do themselves after a deal is completed, but if the talent isn’t there from the beginning, you’re probably not going to get the deal. Make sure your employees reflect the best of the best because that’s what will set your company apart during an M&A.
Don’t Forget the Basics
Sometimes the world of technology can make it easy to forget the simplest, but most effective things in the world of business. While technology is essential, as well as the ability to offer unparalleled innovation during an M&A, it’s also vital that you just remember the basics. Virtual data room company Firmex offers a series of content and videos on how to manage your body language as a deal maker. It’s the most subtle things, including the ability to make a strong first impression and build trust, which can lead to a more valuable tech industry M&A.
Work with the Right Advisers From Early On
One of the biggest issues that can derail M&As for even the most promising or enthusiastic of tech companies is a lack of professional advisement. Most experts in the tech industry who have experience navigating M&As would say having the right team in place isn’t just important—it’s also vital that you do so at an early stage in the game. If you wait too long to get this team together, it can be difficult to rebound from the damage that may be done. You want to make sure that you’re on top of everything, including what could seem like insignificant clause proposals that could actually keep your tech M&A from being successful, at least from your standpoint.
While 2016 certainly isn’t the amazing year many analysts were expecting in terms of M&A for tech companies, it doesn’t mean all is lost. If you’re planning on an M&A this year, it’s important to focus on the basics, while also being proactive and organized in your approach.
