UK IT deals defy wider downturn

by Editor 1/27/2009 4:07:00 PM
UK information technology firms have gone largely unfazed by the wider downturn in business takeovers and consolidations. The IT firms reported that the value of transactions in the IT sector has increased, writes ContractorUK.com.

IT transactions leapt to £16 billion in 2008, a 10 percent rise on 2007, according to the numbers from PricewaterhouseCoopers. The results also show that UK firms are buyers or sellers in a third of all mergers and acquisitions in the IT sector.

The most favourable targets for takeover were IT firms that specialize in the public sector, such as Detica (acquired by BAE) and Civica (bought by 3i). PwC analysts say that government contracts offered suitors “reliable forward earnings visibility.”

UK IT firms will continue to be acquired by foreign companies in 2009, much like Axon was acquired by HCL. Ovum analysts say that expanding Indian IT firms can be expected to offer takeover bids to IT outfits in the UK that are seen as “focused, fast-growing, high-value and close to customers.”

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