Digital Services Industry Q3’24: Record Private Equity “Dry Powder” and AI wave fuels opportunities — 350+ M&A deals totaling over $7.7 Billion

The 13th edition of our quarterly Digital Services Industry Update provides updates on important news and events, M&A activity, 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.

H2 2024 started off strong, with consistent deal momentum underpinned by increased certainty around interest rates, a record amount of Private Equity dry-powder and the market’s pent-up demand for dealmaking. The generative AI wave has opened opportunities for the sector, as enterprises turn to service providers to help harness the power of AI and seek to enhance their tech stacks via inorganic growth.

Overall Digital Services M&A activity in Q3 increased, totaling 350+ & $7.7bn+ disclosed M&A deals, with consistent fundraising transactions at 470+ & $7.1bn+ disclosed fundraises, including:

• EPAM Systems acquired Neoris for $630m
• Cherry Bekaert, a portfolio company of Parthenon Capital, acquired Kerr Consulting for an undisclosed amount (Deal advised by Drake Star)
• slashwhy has raised an undisclosed amount of growth investment from Maxburg (Deal advised by Drake Star)
• VINCI Energies, a subsidiary of VINCI, acquired Fernao Group for an undisclosed amount
• QXO raised $4.2bn of development capital from Jacobs Private Equity, Sequoia Heritage, and other undisclosed investors
• HR Path raised $538m of growth capital from Ardian
  
  

Despite dealmakers having to adapt to dynamic market and political conditions in Q4 2024, we expect further M&A consolidation and Private Equity’s continuous investment in bolt-on acquisitions and its abundance of dry powder to drive more investments in the space.

Download the report below for more detailed insights, including selected highlight M&A deals from the quarter and the past twelve months, fundraisings and our Digital Services Index which shows an excellent performance against a stagnant NASDAQ.