Technology Insights 2006

February 2006

Welcome to the 2006 edition of PricewaterhouseCoopers Technology Insights. This report provides an overview of global M&A in the technology sector during 2005 - with analysis and comment on the market's principal trends, driving forces and outlook for 2006.

Technology 'mega-deals' were a key feature of the market during 2005 with 14 €1bn plus transactions completed during the year. While deal volumes were on a par with 2004, these major deals combined to lift the total value of technology transactions in 2005 by nearly 90%.

Software continues to lead the way, but 2005 also saw a resurgence of activity in the hardware sector whilst much of the excitement has been generated by the emerging and maturing business models around the converged internet - with Yahoo, eBay and Google almost inevitably leading the way.

Blockbuster deals tend to grab the headlines but, away from the limelight, the middle-market still accounts for the bulk of technology transactions - no less than 95% of deals last year were valued at less for the bulk of technology transactions - no less than 95% of deals last year were valued at less than €500m.

The PricewaterhouseCoopers technology team had an active 2005, advising on a number of high profile transactions in the mid-market, including the sales of ITNET to Serco, NDR to Phoenix IT Group and IDS Enterprise Systems to IBS, as well as the pending acquisition of the Product Related Services business of Siemens Business Services in Germany by Fujitsu Siemens Computers.

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