• Between 2016 and 2022, the number of Tech M&As quadrupled in Europe. The most significant increase occurred between 2020 and 2021, when transactions almost doubled (+87%) 
• In Europe during this period, 47% of all Tech M&A transactions were carried out by tech companies themselves 
• M&A transactions are primarily driven by companies' desire to internationalize, access disruptive innovations, and accelerate their go-to-market strategies 
• Financial results alone are no longer sufficient to evaluate the success of an M&A transaction. The focus is now on integration success, assessed through factors such as customer retention as well as employee retention, and alignment of corporate cultures 

Paris, June 15, 2023: Roland Berger and Viva Technology have published the study "Navigating the Tech M&A Landscape: Strategies for Success and Value Creation in a Rapidly Evolving Ecosystem" dedicated to analyzing the trends, challenges, and success factors of M&A transactions involving tech players in Europe. Leveraging the experience of international executives representing both corporate players and scale-ups, the study reveals the growing importance of these transactions in an evolving and uncertain ecosystem, where valuations are declining. Roland Berger and Viva Technology reaffirm the importance of non-financial criteria in evaluating the success of such a strategy.

Tech M&A, a strategic tool for accelerating growth 

With technological advancements and unpredictable macroeconomic conditions, the current context encourages companies from all sectors to reassess their growth strategies by leveraging disruptive technologies. The technology sector, in particular, offers tremendous potential. Europe has witnessed a significant increase in M&A transactions involving companies in this industry, their numbers nearly doubling (+87%) between 2020 and 2021. While these transactions come with new challenges, they also present real transformation potential for companies, offering a means to quickly access technologies and expert talent. In Europe, the tech sector itself represents the largest acquirer, accounting for nearly half of all transactions (47%).

M&A transactions targeting tech companies are motivated by a wide range of intentions and objectives, including transformation needs, international expansion strategies, and the desire to rapidly access disruptive innovations. These transactions allow companies to bypass lengthy product development processes and gain a competitive advantage by entering new markets quickly. François Bitouzet states, "Acquiring a tech company significantly accelerates the technological development of the buyer by reducing the time needed for R&D. It strengthens the acquirer's position in its sector by accelerating the market introduction of its products." For companies, these acquisitions are a source of efficiency, profitability, and competitiveness. Furthermore, these acquisitions – often referred to as "acqui-hires" – hold considerable potential in human resources terms. In certain cases, companies acquire another company primarily to rapidly gain new talents with specific skills in rare areas of expertise.

The success of an acquisition is measured by the integration's success, with factors that go beyond financial KPIs.

Regardless of the motivations, a successful transaction can only be achieved through organizational alignment and the establishment of effective governance structures. In pursuit of this goal, some companies have implemented an Integration Management Office (IMO). Nicolas Teisseyre explains, "Rigorous monitoring of the integration process is essential. Plans must be prepared, taking into account all the challenges that integration may present. A dedicated team is therefore welcome in this regard."

Communication, far from being a negligible factor, plays a key role in the success of such a project. It is crucial to quickly establish a high-performing internal organization and is particularly indispensable for overcoming language barriers and time zone differences, especially in cross-border transactions. Nicolas Teisseyre emphasizes the need to establish trust with the acquired company: "One of the main concerns for employees during an acquisition is safeguarding their jobs. Good communication is precisely how leaders can reassure them and help them fully integrate into their new work environment." Communication is even more delicate in such cases as it is often subject to significant cultural differences. It is essential to build customized integration strategies to ensure an effective and tailored integration process for each acquired company.

With these imperatives, evaluating the success of a merger and acquisition cannot be limited to analyzing its financial results. It is also necessary to ensure cultural alignment, talent retention, and customer satisfaction.

"M&A transactions offer numerous advantages for a company, enabling rapid entry into a new market. However, to guarantee the success, it is essential to have an operational integration plan, communicate the opportunities on offer, both for the company and its employees, and closely monitor the entire integration process," says Nicolas Teisseyre, Roland Berger.

"M&A transactions are a crucial driver in the tech ecosystem. In the global race for leadership, acquisitions are an effective tool, offering companies the opportunity to grow rapidly and access foreign markets, rare talents, innovative ideas, and products that have the ability to propel our companies to new heights," states François Bitouzet, CEO of Viva Technology.

The complete study is available here: https://www.rolandberger.com/en/Insights/Publications/Navigating-the-Tech-M-A-Landscape.html

About Roland Berger: 

Roland Berger is the only management consultancy of European heritage with a strong international footprint. As an independent firm, solely owned by our Partners, we operate 51 offices in all major markets. Our 3000 employees offer a unique combination of an analytical approach and an empathic attitude. Driven by our values of entrepreneurship, excellence and empathy, we at Roland Berger are convinced that the world needs a new sustainable paradigm that takes the entire value cycle into account. Working in cross-competence teams across all relevant industries and business functions, we provide the best expertise to meet the profound challenges of today and tomorrow.

For more information, visit http://www.rolandberger.com

About VivaTech: 

VivaTech accelerates innovation by connecting startups, tech leaders, major corporations and investors responding to our world’s biggest challenges. This is where business meets innovation. VivaTech organizes Europe’s biggest technology and startup event each year, over four exciting days in Paris. We unite the most disruptive topics in tech, rule-breaking entrepreneurs, and the world’s largest technology breakthroughs, building an ecosystem where business gets done.

VivaTech is a global community including thousands of visionary startups, investors, organizations, corporations, researchers, media, and talent.

The seventh edition of VivaTech is taking place June 14-17, 2023. 

For more information go to our website at https://vivatechnology.com/media or follow us on social media.

Press contacts: 

Antoine Barbier – Communication and Press Relations Officer, Roland Berger – +33 6 08 71 48 79 – antoine.barbier@rolandberger.com

Clémence Naizet – Manager, iconic – +33 06 64 63 89 98 – cn@iconic.fr