Section of logic board

Analysis

Technology, media, and telecommunications M&A update: Q1 2018

As the internet of things (IoT) continues to become an integral part of professional and personal business, 5G technologies and artificial intelligence (AI) will be able to run faster and be implemented quicker than before. Automotive technology has also benefited from IoT and AI, contributing to increased growth and focus in the industry. This technology, media, and telecommunications (TMT) mergers and acquisitions (M&A) update provides Deloitte Corporate Finance LLC insights and market data analysis that shed light on M&A trends in the TMT industry.

TMT trends

  • 5G and the internet of things (IoT)1: 5G technology promises to bring reliability, latency, scalability, security, and ubiquitous mobility, making it a key component of the communications and connectively layer of the IoT technology stack. By 2021, 5G’s enablement of IoT use cases is expected to drive 70 percent of Forbes G2000 companies to spend $1.2B on connectivity solutions.
  • Financial technologies (Fintech)2: Financial applications are growing in sophistication and software as a service adoption is accelerating. Gartner estimates that by 2020, 20 percent of non-value added tasks within the office of finance will be automated as cloud-based finance systems leverage AI capabilities that were not possible on premise due to data and processing limitations.
  • Automotive technology3: The increased focus on making vehicles more connected, automated, and driverless has transformed vehicles from independent, closed systems to connected ecosystems, creating new security vulnerabilities. Frost & Sullivan research shows that the automotive industry’s spend on cybersecurity is expected to grow at a 24.4 percent compound annual growth rate from 2015–2025 to combat these ever-increasing cyber risks.
  • Artificial intelligence (AI)4: The proliferation of AI technologies is allowing organizations to automate and scale with hyper-efficiency. Next-generation AI systems will require significant investment in integrated systems with rich data streams, software, and closed-loop self-training model management services, providing a significant opportunity for providers of such technology.

This newsletter is a periodic compilation of certain capital markets information. Information contained in this newsletter should not be construed as a recommendation to sell or a recommendation to buy any security. Any reference to or omission of any reference to any company in this newsletter shall not be construed as a recommendation to sell, buy, or take any other action with respect to any security of any such company. We are not soliciting any action with respect to any security or company based on this newsletter. This newsletter is published solely for the general information of clients and friends of Deloitte Corporate Finance LLC. It does not take into account the particular investment objectives, financial situation, or needs of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all investors. This newsletter is based on information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Prediction of future events is inherently subject to both known risks, uncertainties, and other factors that may cause actual results to vary materially. We are under no obligation to update the information contained in this newsletter. We and our affiliates and related entities, partners, principals, directors, and employees, including persons involved in the preparation or issuance of this newsletter, may from time to time have “long” and “short” positions in, and buy or sell, the securities, or derivatives (including options) thereof, of companies mentioned herein. The companies mentioned in this newsletter may be: (i) investment banking clients of Deloitte Corporate Finance LLC; or (ii) clients of Deloitte Financial Advisory Services LLP and its related entities. The decision to include any company for mention or discussion in this newsletter is wholly unrelated to any audit or other services that Deloitte Corporate Finance LLC may provide or to any audit services or any services that any of its affiliates or related entities may provide to such company. No part of this newsletter may be copied or duplicated in any form by any means, or redistributed without the prior written consent of Deloitte Corporate Finance LLC.

References

1 “5G and IoT in 2018 and beyond: the mobile broadband future of IoT,” I Scoop. November 1, 2017.
2 “Predicts 2018: SaaS financial management applications increase integration, automation and sophistication,” Gartner Research. November 1, 2017.
3 “Cybersecurity and the automotive industry,” Frost & Sullivan. June 2017.
4 “The top technology trends to watch: 2018–2020,” Forrester Research. October 23, 2017.

Did you find this useful?