Technology M&As to Keep Booming in 2007

Technology mergers and acquisitions are forecast to jump 40% next year, as private equity companies flush with cash increase their activities in the sector.

That increase would follow this year’s projected increase of 50%, says Eric Gebaide, a managing director at Innovation Advisors. The New York-based investment banking firm recently released a report saying that global technology M&As would rise to $248.4 billion this year, the highest since $490.3 billion in 2000.

In recent years, there has been a surge in the number of private equity firms, which seek to buy companies, improve their performance and then sell them at a profit. Hedge funds and venture capital firms have both gotten into private equity, bringing enormous resources and expertise to the area.

“I don’t think there’s a venture fellow I’ve spoken to in the last two years who isn’t also planning to do private equity,” Gebaide says.

Besides the sheer dollars chasing deals, this year’s tech M&A boom has been propelled by a strong market for initial public offerings in India, which has provided an exit opportunity to private equity companies investing in that fast-growing country.

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