M&A expertise in our IT market update: H2/2023

In the second half of 2023, the German IT services industry continued its path of market growth compared to previous years, but deal activity declined compared to H2/2022. One reason for this might be that valuations returned to pre-Covid levels for some sub-sectors on publics markets. However, valuations remain very attractive in selected private M&A deals and the total deal share of private equity has increased over the past three years.

We analyse market developments and deal activity in the following chapters:

• Market overview: during the same period, the IT services industry grew by 9.4% globally and 8.1% in Germany, driven by megatrends such as the Internet of Things (IoT), cloud transformation, artificial intelligence (AI) and cybersecurity.
• Deal activity and valuation: after mirroring the previous year's trajectory in the first half of 2023, deal activity declined by ~30% compared to H2/2022.
• Spotlight: IT security in Germany - increased spending driven by increased threats

We would like to thank you for your interest in our IT services sector update.