TMT was PKF Smith Cooper Corporate Finance’s second highest sector for deal activity in 2023, accounting for 14% of our total transactions for the year. In our latest instalment of our ‘5 minutes with Corporate Finance’ series, Darren Hodson takes a closer look at M&A in the TMT sector during 2023 and trends likely to impact the deal landscape for 2024.

2023 in review

Ongoing economic and geopolitical challenges stunted dealmaking across the UK during 2023, with recorded M&A activity down in every industry compared to 2022 (Experian, 2023). 

Despite an 18% and 21% decrease in deal volume and total deal value respectively, the TMT sector remained the most active industry for M&A. 

While the TMT sector was also impacted by declining deal numbers, certain areas saw a surge of activity in 2023. Technology accounted for approximately 25% of TMT deals and AI deals experienced an 11% year-on-year increase.  

Q3 and Q4 also showed promising signs of early recovery for the TMT sector, with the rate of decline slowing in the latter half of the year. This has left many feeling cautiously optimistic for an increase in deal activity in 2024.  

Trends for 2024 


The growing global interest in AI, spurred by the rise of generative AI and dubbed by many ‘the AI revolution’, will no doubt continue to fuel further deal activity in 2024. 

We are seeing a trend of companies across industries using M&A to expand their AI capabilities to uphold or gain a competitive edge. We will likely see new AI-focused tech start-ups emerging en masse over the next few years, which could become future M&A targets for larger tech companies. 

Enhancing technological capabilities

The trend for making strategic acquisitions in the technology sector goes beyond AI, with companies also looking to grow their technological capabilities in other areas, such as cloud computer and cyber security. Other factors that will likely stimulate strategic deal activity in TMT include companies hoping to gain access to new markets and executing growth plans. 


Fintech remains one of the most well invested TMT sectors over the last 5 years with significant activity within KYC/AML, fraud detection and underwriting-as-a-service, which can now be considered crowded sectors. We are expecting future deal activity to favour strategic acquisitions in the CFO stack, payments, expense management, financial services infrastructure and WealthTech sectors as corporates seek to expand and develop their product offering. 


It is no secret that there remains a shortage of highly skilled employees working across the TMT space, from traditional fixed-line telecoms through to software engineers. In these scenarios, strategic M&A proves a definitive route to acquiring key talent and knowledge with the added benefit of potentially obtaining new customers to take advantage of cross-selling opportunities. 

Private equity

Private equity (PE) was a significant driver of M&A activity in the TMT sector last year, particularly within software and other sub-sectors with high growth potential. This increased interest in the sector is likely to persist in 2024, as high-margin business models and strong cash flows continue to attract PE investors to TMT deals. 

More generally, 26% of all UK transactions involved PE investment during 2023. The number of deals involving PE funding across all sectors will likely continue to rise and significantly influence the dealmaking landscape over the next few years. 

Value extraction

2024 will likely bring a renewed emphasis on extracting maximum value from every transaction, as borrowing costs remain high. This could present itself in stricter due diligence procedures and a stronger focus on integration strategies post-merger to increase the likelihood of a deal’s success.  

Regulatory hurdles

Introduced to the UK in 2021, the National Security and Investment Act stipulates that the government must be notified of certain deals and give clearance on them before they can be completed. The act also allows the government to examine deals up to five years after completion. In the US, certain transactions involving overseas investors are also coming under greater scrutiny from the Committee of Foreign Investment, resulting in more intensive deals with longer completion times.  

If the trend of consolidation continues within the tech industry, M&A involving large tech companies could face stricter regulations surrounding anti-competitive practices, which could increase the duration of the deal approval process. 

Deal support from one of the UK’s most active advisers 

In the last three years, PKF has completed over 100 deals in the broad technology sectors and we continued to build on this expertise in 2023 with transactions in enterprise software, retail-tech and health-tech.  

If you are looking to invest or sell within the TMT industry, PKF is the 5th most active dealmaking team in the Midlands and 7th in the UK. Contact us today to discuss your needs with one of our expert deal advisers.