Happy New Year! This is Stanton Jones with your weekly briefing on what’s important in IT and business services.
The 4Q21 ISG Index call is Monday, January 10 at 9:00 AM EST. We hope to see you there as we recap the unprecedented year that was 2021 and forecast what’s in store for 2022.
Register here.
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2021 was a record year for M&A in the IT services industry. There were 47% more deals in 2021 than in 2020, and the value of those deals was up 63%. Excess capital saved up during the pandemic, low interest rates and strong demand for digital transformation capabilities were the key drivers that led to this record-breaking year.
Accenture, Deloitte, IBM, Atos and Tech Mahindra were the most active in 2021; they primarily targeted other IT services firms (see Data Watch). Within this segment we’re primarily talking about cloud engineering, cybersecurity and analytics – capabilities that are in super high demand as companies accelerate their digital transformation initiatives.
And let’s not forget about the role of private equity in technology M&A. In 2021, PE firms accounted for seven $1B+ transactions. For example, KKR acquired ISG Leaderboard provider Ensono; I Squared Capital acquired KIO Networks, Mexico’s largest data center operator; and just before the end of the year, Advent International acquired digital engineering firm Encora.