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Digital Services Industry Update Q1’24: Buyers focus on disruptive assets with emphasis on business optimization, productivity and security benefits

16 Apr 2024
The 11th edition of our Digital Services Industry Update provides updates on industry insights such as mergers and acquisitions activity, important news and events, and insights into the present and future trends impacting major areas of investment within the industry, including digital transformation, cloud migration, tech-enabled services, security services and business intelligence & data analytics. Click below to download the full report for more insights. 
 
Q1 2024: Rise in M&A Activity in Digital Services Sector Driven by Optimization efforts 
The first quarter of 2024 saw consistent deal-making with a slight uptick in M&A deals as financial and strategic buyers continued to look for disruptive Digital Services assets, with an emphasis on business optimization, productivity, and security benefits. The quarter marked consistent participation from Private Equity with a strong appetite for synergistic bolt-on acquisitions, to unlock further value and potential returns as part of a Buy & Build strategy. Overall activity for Q1 2024 totaled 320+ & $4.4bn+ disclosed M&A deals and 420+ & $2.1bn+ disclosed fundraises including:
 
  • Accenture acquired Arhs Group for an undisclosed amount. The acquisition will further enhance Accenture’s public service offering.
  • Saalex acquired Spalding Consulting for $75m. The acquisition enables Saalex to grow their access to federal agencies and enhance software development services.
  • Wavestone acquired Aspirant Consulting for an undisclosed amount. The merger enables Wavestone to strengthen its presence in the United States and take advantage of synergies.
  • GSS raised $47m of Series A2 funding from AlixPartners, Cynosure Group and Commonwealth Bank of Australia. The investment coincides with the company’s preparation to go live with inaugural clients. 
  • Velosio raised an undisclosed amount of development capital from Court Square. The funds will be used to further expand industry footprint as a provider of innovative business solutions and cloud technologies. 
  • Plexus raised an undisclosed amount of development capital from Portobello Capital. The investment will support growth and financing of acquisitions.
 
Anticipating a Surge: Increased M&A and Fundraising Activity in Tech-Driven Sectors
Looking ahead in Q2 2024, we expect an upswing in M&A and fundraising activity as the market continues to consolidate. We anticipate continued demand for digital & tech-enabled services with the potential to help companies understand and harness next-gen technologies, such as generative AI, for business intelligence, productivity, and to accelerate digital transformation agendas.
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