Contact

IT sector: The most active investor


Integral service around a transaction
BY : Diego GutiérrezDecember Fri, 2020

The most active investor in the information technology (IT) sector is 3i Group. The IT sector consists of companies that produce software, hardware or semiconductor equipment, or companies that provide Internet or related services.  

The three major industry groups in the IT sector are :  

  • Software and services
  • Hardware and technological equipment  
  • Semiconductors and semiconductor equipment 

These three industrial groups are further divided into industries and sub-sectors. 

The most active investor is the Information Technology sector. 

In recent years, the information technology sector has been the focus of a great deal of investment activity. To give you an idea, in the last 3 years in Europe, there have been 4073 investment rounds and 1,131 acquisitions.  

One of the most recent funding rounds in the IT sector, announced on 19 January 2021, has been the one that has received KONUXKonux, a German software platform for the rail sector, uses smart sensors and machine learning for efficient maintenance of track devices. Konux, which has raised €65m in a round led by Sanno Capital. 

One of the latest acquisitions announced so far, on 12 January 2021, has been that of Orbus softwarea UK-based IT and business transformation software company, by Silvertree Equity.  

The most active private equity investor in the sector in Europe is 3i Group.  

3i Group : Approach 

London-based 3i Group is currently the most active investor among the top international investment managers focused on private equity and infrastructure. 

From an infrastructure point of view, they are focused on sectors adjacent to utilities, transport, communications and energy. 

From a Private Equity perspective, sub-sector specialisation is at the core of their investment strategy. They invest in four main industry sectors: business and technology services, consumer, healthcare and industrials.  

So far 3i Group has conducted 455 rounds of financing, 95 acquisitions and 175 exits.  

Within the IT sector, they are focused on the following sub-segments:  

  • Intelligent outsourcing 
  • Testing, inspection and certification (TIC) 
  • Governance, risk and compliance 
  • Education and training 
  • Services to pharmaceutical companies 
  • Vertical application software 
  • Human resources outsourcing (HRO) 

The image shows the sub-sectors in which 3i Group invests:  

subsectors in which 3i Group 

They invest in companies with a value-added service offering, backed by intellectual property and sufficiently focused to differentiate themselves from large companies. 

The typical holding period for investments is 3 to 5 years, although they may be held for longer depending on the strategy of the company. investment

Financially, they invest in companies in Europe and North America with an EV typically in the range of EUR 100 to 500 million and with international growth potential. 

Geographical area of interest:  

Geographical area of interest 3i Group

Currently, within the IT sector, they have 6 companies in their portfolio: BVGEvernexFormelDarrives (formally I.EC.), WYD and Magnitude . Among his past investments, there are very interesting companies such as Civic or ERMamong others.  

As we have seen throughout the post, the information technology sector is a very interesting sector in which there are private equity firms such as 3i Group, which are very interested in the investment opportunities that exist in the sector. 

The M&A Professionals

Meet our services

CONTACT US

MEET
OUR
METODOLOGY

Do you want to be up to date?

SUSCRIBE OUR NEWSLETTER

Our diferentiation

Market Research Technology
Our team of market analysis specialists is continuously analyzing the investments of the most active markets in the industry in order to unceasingly contribute ideas of the current market situation and identify the most relevant trends for senior management. We integrate the most relevant sources of information which allows us to discover the most interesting companies for venture capital and similarly helps us to identify the investors with the highest probability of involvement in an M&A process to ensure the success of our sell-side operations.

The reports and deductions of our advisors provide a broad view of the sector, both geographically and from the complementary or adjacent markets perspective.
Technology Data Analytics
for M&A
Advanced data anlytics is a weapon". Intelfin is an artificial intelligence tool we use for investing and creating value in SMEs through competitive analytics and the enterprise environment.

IntelFin consists of a cognitive system, which, through the application of advanced analytical technologies, facilitates the automation of investment and financing decisions in the field of non-listed companies and especially SMEs in high-growth sectors.

The information related to these companies is characterized by their lack of transparency and heterogeneity; thus, it is necessary to develop an advanced analysis which is as much predictive as prescriptive and is developed in a natural language custom, suitable to obtain greater clarity and knowledge of the investment scope.

The IntelFin system focuses especially on analyzing the variables that define and influence the competitive environment of a sector and the positioning of a company, analyzing their influence on future value creation. Therefore, IntelFin supports strategic decision-making to senior management by resolving questions such as:

¿What are my competitors' priorities, strategies and expansion plans? Who's my competition? Which competitor is most likely to grow at a higher rate?
Which areas of activity/business models will receive the most investment? Which sectors are most attractive to investors?
Which companies are going to experience the most growth in the near future? Which companies are most likely to receive investment or be acquired?
Training Methodology
We have developed training programs in an innovative set-up which guarantees our teams the acquisition of technical competences both in the field of corporate finance and in the field of psychology, that is much needed when it comes to negotiation processes.

We have a culture of continuous improvement of our processes, closely related to the use of information systems that allow the enhancement of internal communication between our teams, as well as external communication with our customers. Hence, we extend best practices identified internally in an efficient and rapid manner among our members.

Are you one of those who prefer to be well informed when making decisions?

M&A NEWS
INDUSTRIAL REPORTS
crossmenu