Published: May 27, 2020

Some restaurants are back open, sports are starting to get played again and even a handful of traders have returned to the NYSE. But even as some of the broader business restrictions from March start to get lifted, the tech M&A market remains in lockdown.

And yet, as we've chronicled since the coronavirus pandemic emerged in late February, some glimpses have appeared of what the M&A market might look like as it reemerges from the sharpest and most severe downturn in its history. (It's no exaggeration to say that spending on tech deals is an order of magnitude lower right now than it was before the coronavirus outbreak.)

Two of the key trends that are shaping the current market and likely to guide the activity as it picks back up in the coming months include:

  • Similarly, companies that have ample financial resources will be the first to step back into the M&A market. Richer cash-flow generation and lower debt positions make it more likely to free up money to go shopping. Consider Apple, which netted more than $11bn in Q1, according to S&P Global Market Intelligence. Our data shows the Cupertino, California-based giant has been an infrequent acquirer over the years but has already announced four transactions in 2020.
These two trends come together in a single vendor: Microsoft. The tech stalwart is currently navigating the third broad economic recession of the past two decades, but that hardly shows up in its current results. Shares of the company have jumped 15% so far this year, as revenue growth has actually ticked a percentage point or two higher than in recent years.

In terms of M&A, Microsoft hasn't been slowed by the COVID-19 outbreak either. It has already printed four deals, basically keeping the same pace for acquisitions in 2020 that it has held each year since the dot-com collapse, according to the M&A KnowledgeBase. And the company is clearly acquiring with an eye toward the future, picking up technology this year to further its ambitions in such rapidly emerging markets as robotic process automation and 5G.
Brenon Daly
Research Vice President

Brenon Daly oversees the financial analysis of 451 Research's Market Insight and KnowledgeBase products, having covered more than a quarter-trillion dollars' worth of deal flow for both national publications and research firms.

Sheryl Kingstone
Research Director

Sheryl Kingstone leads 451 Research’s coverage for Customer Experience & Commerce, which covers the many aspects of how customer experience is a catalyst for digital transformation. She oversees the company’s coverage of a variety of customer experience software markets spanning ad tech, marketing, sales, commerce and service.

Keith Dawson
Principal Analyst

Keith Dawson is a principal analyst in 451 Research's Customer Experience & Commerce practice, primarily covering marketing technology. Keith has been covering the intersection of communications and enterprise software for 25 years, mainly looking at how to influence and optimize the customer experience.

Want to read more? Request a trial now.