What’s Driving Telecom and Tech Mergers in 2024? The Resurgence of TMT Deal-making

In 2024, the M&A landscape in the Technology, Media, and Telecommunications (TMT) sector is expected to see a resurgence, fueled by factors such as the rise of generative AI, a clearer picture on interest rates, and significant pent-up demand for deals. Private equity firms, with substantial capital ready to invest, are likely to drive much of this activity. Key areas that will see heightened M&A activity include:

1. Enterprise Software: With its subscription-based revenue models, the software industry remains a hotbed for investment, particularly for private equity. Even though deal sizes may be smaller, the recurring cash flows and predictability of revenues make it an attractive target for investors.
2. Telecom Infrastructure: Telecom companies are expected to continue consolidating, particularly through the Netco model, where the network infrastructure is owned and leased out to service providers, attracting strategic and private equity investments.
3. Streaming Services: Post-strike, streaming companies are better positioned to evaluate costs and consumer trends, potentially leading to consolidation in the sector as some platforms seek strategic partnerships to stay competitive.

Overall, TMT dealmaking will emphasize extracting more value from transactions in response to tighter capital conditions​

(Source: PwC)