Bertrand Hermez, head of Clairfield’s technology practice together with Piotr Kolodziejczyk, says that the record number of deals in the technology, media, and telecom sector so far this year shows no sign of letting up, promising to make 2021 a landmark year for deals in this industry.
Clairfield’s own practice is flourishing as well. The tech sector is particularly suited to crossborder middlemarket deals and therefore has been a focus of Clairfield since inception of the firm in 2005. While Clairfield consistently ranks at the head of the tech league tables, this year the team will likely beat internal records, with 27 transactions closed so far in 2021 and an active pipeline.
“Most years we have closed about 30 deals in the TMT sector, so this is shaping up to be a record year in tech for Clairfield,” says Bertrand Hermez. “I attribute this partly to pent-up demand from COVID as some deals that should have closed in 2020 were pushed back to H1 2021.”
COVID has had other effects as well, as Bertrand sees more deals closed domestically as well as a rise in backing by local private equity firms. “Our clients on both the sell and buy side are showing an appetite for feasible, uncomplicated domestic deals. Even when we introduce a deal internationally and have pricing tension from multiple international offers, we are seeing a preference for closing locally. This is likely to be a short-term trend however.”
Clairfield research shows that software and apps represent 40% of the TMT transaction volume in 2021 YTD, a 21% increase from recent years, with most valuation exceeding 14-15x EBITDA.