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Tech deals have stalled, but a sleepy pocket of the market is leading the way in...

 2 years ago
source link: https://finance.yahoo.com/news/most-tech-ma-deals-have-stalled-but-the-info-data-and-analytics-sector-is-on-the-upswing-183616516.html
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Most tech M&A deals have stalled, but the info, data, and analytics sector is on the upswing

M&A activity in the wake of SVB’s collapse: What to know
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M&A activity in the wake of SVB’s collapse: What to know
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Alexandra Garfinkle
·Senior Reporter
Mon, April 24, 2023, 3:36 AM GMT+9·3 min read

Though tech M&A has stalled, there's one area within the sector that's popping — information, data, and analytics, according to a report recently released by Solomon Partners.

It's not exactly the sexiest of sectors, but its importance has increased as economic uncertainty has grown, said Solomon Partners Managing Director Joe Watson. However, it's also a sector — as characterized by companies like Verisk (VRSK), Moody's, and Equifax — that has been on the upswing for some time.

"The information and data services sector is one that has become increasingly valuable over the last ten to fifteen years, as companies have realized it's necessary to get data to drive decision-making," Watson said. "The entire industry has developed and come increasingly into focus."

And, geopolitical and economic volatility has a way of crystallizing the importance of specialized data providers.

"Out of the financial crisis, the sector also saw a spike in interest," Watson told Yahoo Finance. "It's too early to say how much of it is tied to SVB, but we do know from history that times of crisis make businesses that provide data and information more important. After all, when do you most want information — when things are good or when they're bad?"

So the investment has followed. Despite a 14% decline in overall deal volume, information, data, and analytics M&A jumped from 16 transactions in the fourth quarter of last year to 35 transactions in the first quarter of 2023, the report states. The same is true of capital raises — there were 10 done by funds targeting the sector at the end of last year and 17 in Q1 of 2023.

These aren't earth-shattering deals, to be sure. But in a market where dealmaking is barely moving, it's notable.

For example, one of the deals that got done this quarter was financial services company Wilshire's creation of Wilshire Indexes, a separate entity and new data-focused venture with the Financial Times and Singapore Exchange.


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