The level of private equity investment in the technology sector looks set to rise over the next two years, according to an expert at Grant Thornton in Southampton.
Paul Stout, Associate Director, Corporate Finance, at the Southampton office says this spells good news for technology firms in the region.
He said: “According to Grant Thornton’s latest report, more than half of UK private equity (PE) and venture capitalists expect the level of PE investment in the technology sector to increase over the next two years, with cloud and managed services viewed as the top two most attractive sub sectors.
“Investors have rediscovered their appetite for technology assets, especially as fragmentation is creating a large number of specialists in niche areas, with attractive scaling options and buy-and-build opportunities for the cloud, managed services, Big Data and mobile enterprise applications sub-sectors.”
According to the report from Grant Thornton, over the next 12 months two thirds of respondents expect fierce competition for deals amongst UK PE firms. A quarter of respondents anticipate that trade buyers will be their most significant competition and 93% predict that trade sales to be the most likely exit strategy. This compares to nearly a quarter (23%) predicting a sale to another financial investor and only 8% believing exits will be achieved via an initial public offering (IPO).
Over half of respondents do however recognise that the financing environment and Eurozone uncertainty will continue to be significant obstacles for UK technology businesses over the next two years.
