Description
M&A activity slowed in the last 18-24 months given the shifts in the macroeconomic environment that emerged in the post-pandemic period. Rising interest rates increased the cost of capital, enterprises became more cautious and this led to growth deceleration that translated into a more cautious decision-making environment. Everything was affected, including strategic M&A. But while overall activity slowed, the sector continued to push forward and transactions were completed. The hyperscale data centre space, in particular, was highly resilient, and a number of large transactions reached the finish line in the recent period. Overall data centre investment activity showed no signs of slowing down and new company formation was steady and consistent. Meanwhile, cloud and edge providers invested in technology and consolidated assets in the pursuit of more scale. The macroeconomic environment may have created headwinds for M&A, but also laid the groundwork for realignment and carve-out transactions. Bigger and aggressive plays may not have been ideal in the recent period, but critical strategic decisions could no longer be put off and were placed on the table. There are now signs that things are starting to pick up. Strategic buyers have started to become more engaged, while capital is flowing into the sector at a dizzying pace. The pieces are in place for a return to the regular M&A that is a hallmark of what has always been a fragmented and constantly realigning sector. This report summarises and takes a closer look at mergers and acquisitions activity over the last 12-16 months. The analysis is global in scope and includes closer takes on activity in select European and Asia-Pacific markets, while spanning the spectrum of Internet infrastructure services, ranging from the SMB space to enterprise and hyperscale, along with emerging categories like edge and AI.
