Merger and Acquisitions (M&As) in global IT and Business Process Outsourcing (BPO) sector reduced to a six months low with only 27 transactions totaling $202 million for the month of Feb. '09. The month witnessed the steepest drop in both M&A volumes totaling only 33 percent of the Sept. ’08 month deal count and in terms of deal value only about 7 percent of $2.8 billion. Coming on to month-on-month comparison, Feb. month saw over 40 percent drop in both deal volume and deal value when compared to the previous month. The average deal size for the month however stood its ground at $7.5 million showing only a minor drop from the January figure of $7.6 million.

From a geographical perspective, acquirers based in the U.S. continue to dominate by contributing close to 60 percent of total volumes, unlike other geographies (including the U.K., Canada, Japan and Germany), which contribute between 4 to 7 percent. The U.S.-based acquirers carried out 10 domestic and six outbound deals. The U.S. outbound deals targeted firms based in Canada and the U.K. In terms of lines-of-business, IT software continues to attract highest number of acquisitions specifically in the area of end user computing, enterprise software, network infrastructure security software and others.

On the target front, the top three targeted geographies were the U.S. (12 deals), followed by Canada (six deals) and then the U.K. (three deals). Others in the deal count include Japan, Netherlands, Spain and South Korea. India was missing both as acquirer and target country in a month for the first time in recent history.

 Source: Tholons