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Investing in the media and telecoms space: what's been driving record levels of M&A growth?

Paul Landsman talks to CBR and telecoms.com about the driving forces behind record levels of M&A growth in the TMT sector. 

The telecoms, media and technology (TMT) sector is responsible for record growth in global M&A activity, reaching $2.5tn in the first half of 2018M&A deals involving telecoms and media companies in 2018 has registered a historic high of over $300 billion, six times higher than last year.

Huge transactions, such as T-Mobile’s $59bn merger with Sprint, have significantly fuelled the growth, despite the attention paid by regulators, but it doesn’t stop there. Small and medium sized businesses are also heavily contributing to the growth, using M&A as a means of sustaining revenue growth and expanding into new markets.

 

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In the US and Asia TMT hubs continue to flourish. Silicon Valley in the US, and cities such as Beijing, Tokyo and Bangalore nurture vibrant start-ups that attract global attention. We have also seen very high levels of optimism in the UK and other European countries, regardless of uncertainties around Brexit, as businesses manage to adapt economically to the changes that are taking place.

One factor that is enabling this agility is the cloud. Cloud services give businesses the ability to innovate and expand rapidly and economically. Those taking a ‘cloud first’ approach are often able to achieve rapid organic growth which, in turn, gives them an upper hand in mergers and acquisitions.

 

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To help them navigate the complex M&A landscape, many businesses will approach private equity firms, not just for the requisite finance, but also for the strategic advice and experience – invaluable in assessing acquisition and merger targets that complement their existing offering and align with their business goals.

With confidence in the sector at all-time high, and innovation coming from all areas of the world, we expect the level of M&A to continue at the current rate, which is likely to lead to the highest year of activity ever recorded.

Paul's views were originally published in both CBR and telecom.com.

If you would like to find out about Livingbridge’s investments in the tech space or would like to talk to us about your business, please contact investments@livingbridge.com.

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