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IT M&A Is Down, Report Says

The IT industry may be slowly emerging from a lean period, although merger and acquisition activity is still on a downturn, according to the latest research from VentureOne.

VentureOnes Quarterly Liquidity Report identified 51 M&A deals involving VC-backed IT firms in the second quarter of this year, compared to 67 in the second quarter of 2004. The total amount spent on M&A in the second quarter of this year was $2.7 billion, down more than a billion from $3.8 billion in the same period a year ago.

Why the M&A slowdown? Matt Garlick, research manager at VentureOne believes that, after surviving the recent economic downturn, a lot of private companies are now looking to build their businesses, rather than look for an exit strategy. “The current market for private companies is more favorable than in the last few years,” he says. “As these companies are getting more revenues and increasing traction it’s sort of ‘let’s wait and see what we can do first.’ ”

Read the rest of the story at NDCF.

— James Rogers, Site Editor, Next-Gen Data Center Forum