Private equity firms are barreling through the records as they place bets on technological revolutions in sectors ranging from finance to health care.
Firms have spent $80 billion acquiring companies in the global technology sector this year, according to data compiled by Bloomberg. That's an all-time high for a quarter and already up 141% on this point in 2020, which went on to be a record year for such deals.
March alone has seen Thoma Bravo ink a $3.7 billion acquisition of fintech outfit Calypso Technology, and the C$221.2 billion ($173 billion) Ontario Teachers' Pension Plan agree to take a majority stake in Mitratech, a provider of legal and compliance software, in a $1.5 billion deal.
In Europe, TA Associates said it would take over Dutch enterprise software firm Unit4 in a $2 billion-plus transaction, while one of Insight Partners's portfolio companies bought data management group Dotmatics for as much as £500 million ($693 million). Earlier this year, Montagu Private Equity agreed to acquire U.K. software developer ITRS Group for about $700 million.
Buyout firms are flush with investor cash and are being drawn to startups helping companies to reinforce their businesses following the impact of the COVID-19 pandemic, according to Chris Sahota, chief executive officer at tech-focused advisory boutique Ciesco.
"2021 will be a time of reinvention for many companies and digital technology is driving that, so the private tech market is booming," he said. "After last year's turbulence, businesses want to be agile and they have started to future-proof their operations."