United States: MoFo Survey: Tech M&A Leaders Mostly Bullish About Deal Activity For Next 12 Months, But Forecasts Are Cooling
Last Updated: November 4 2019

The survey shows dealmakers anticipate market changes, with cross-border deals, valuations, and tech IPOs most impacted

San Francisco (November 4, 2019) – Morrison & Foerster, a leading global law firm, today announced the results of its annual Tech M&A Leaders' Survey, which reveals dealmakers are becoming increasingly split on what lies ahead for deal activity in the technology space. According to the findings, the majority of dealmakers expect activity to increase over the next 12 months (40%), while 32% predict activity will remain the same, and 28% anticipate a decline.

Although most dealmakers remain bullish, the results show a narrowing gap, with more respondents delivering a cooler forecast than they did in October 2018, when the last survey was conducted. The report found that economic factors accounted for most of the dealmakers' concerns, with 61% citing fears of a potential recession and 57% citing tariffs or trade disputes as possible deterrents to future deals.

"I don't think it's surprising that dealmakers have mixed opinions at this time," said Eric McCrath, co-chair of Morrison & Foerster's Corporate Department. "The environment is changing. There are a number of unprecedented economic factors and political situations currently at play that make accurately forecasting future deal activity more difficult. Also, 2018 was a record year for tech M&A. We're beginning to see those highs level off and return to a more sustainable model."

According to 451 Research's M&A KnowledgeBase, 2019 tech M&A activity currently trails in comparison to the bullish deal volume and value totals of 2018. In the first three quarters of 2019, nearly 2,700 deals valued at $356 billion were completed, whereas 2,854 deals, valued at $447 billion, were completed over the same period in 2018.

Additional key findings, takeaways, and analysis from the Tech M&A Leaders' Survey include:

Private Equity Forecasts Are Also Mixed

Respondents were also split on how they think tech acquisitions by private equity firms will proceed in the next 12 months, with 35% expecting an increase in activity, 37% predicting activity will stay the same, and 28% anticipating a decrease. According to 451 Research, private equity deals are currently at a slight decline this year, with financial sponsors having completed 7% fewer deals so far in 2019, compared with last year's record activity. Eight out of ten survey respondents point to higher pricing as a cause for this year's dip in deals, while nearly the same number (70%) believe that the need to put more equity into each deal also played a part.

Cross-Border M&A Is at a Crossroads

While cross-border M&A is expected to decline across most regions, targets in Asia-Pacific are most likely to be impacted, according to 48% of respondents, who expect a decrease in deal flow into the region by international acquirers. The number is slightly less for Western Europe, where 42% of respondents predict a decline.

The majority of respondents think cross-border activity will remain consistent in South America (58%) and the Middle East and North Africa (52%), while respondents were evenly split about their predictions of North America: 32% think acquisitions by international acquirers of North American targets will increase, while the same number project a decrease.

Trade disputes are considered the biggest potential hindrance to future international acquisitions, with 73% of dealmakers citing it as a concern. Dealmakers are also taking Brexit into account, with 58% anticipating it having an impact. A higher percentage of respondents are also more concerned with CFIUS than they were last year, with 70% citing CFIUS as a possible deterrent to deals compared to 54% in October 2018.

A Drop in Valuations Is Anticipated

A little more than half (54%) of respondents expect private company M&A valuations to decrease in the next 12 months. This correlates with current market trends, according to 451 Research, which found that among private tech companies selling for $100 million or more, the median multiple stands at 5x trailing revenue in 2019, down from 5.3x last year. About the same number (56%) believe both corporate acquirers and private equity firms will pay lower multiples on future deals.

Unicorns Are Losing Their Luster

In last year's survey, respondents had high hopes for the public debut of enterprise tech companies, with 62% saying they had faith that unicorns would make strong debuts. This year, after seeing the poor performance of a number of consumer tech IPOs despite a surge in high-priced enterprise debuts, respondents are less optimistic in their forecasting. More than half (52%) now believe that the average unicorn would finish its first day of trading with a valuation below its previous post-money, versus 38% who still anticipate a rise in valuations.

Buyers Have New Strategic Priorities

Machine learning continues to grow as a priority for acquirers, according to 84% of respondents who said the technology is becoming more important to strategic goals. This is a significant increase from last year's survey, in which 66% of respondents viewed machine learning as a driver of more M&A. Nearly three-quarters of respondents believe information security is also becoming increasingly important for acquirers, as is cloud computing, per 71% of respondents.


Now in its 15th edition, the M&A Leaders' Survey from 451 Research and Morrison & Foerster drew 101 responses, primarily from investment bankers (36%) and C-level or M&A executives (35%), with the remaining responses coming from lawyers, VCs, PE professionals, and others in the M&A community. Roughly 79% of the responses were from dealmakers and advisers based in the U.S., with Silicon Valley representing the largest single location.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Press Releases from this Firm
Recent Content from this Firm
By Susan I. Gault-Brown, F. Dario de Martino
By Aaron Rubin
By Michael Jacob Steel, Lois Miyashiro
By Morrison & Foerster LLP
By Morrison & Foerster LLP
By Julie O'Neill, Adam Fleisher, Hywote Taye
By Purvi Patel
By Mofo Tech Blog
By J. Alexander Lawrence
By David Lynn, Scott Lesmes, Marty Dunn, Rose Zukin
Font Size:
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions