18 Finance Monthly. Bus i ne s s & Economy How has the pandemic impacted the enterprise technology market? The range of digital technologies that we came to depend on so much during the pandemic, especially those designed to improve remote working and collaboration, are now completely ingrained within the world of work. We may settle into a hybrid-style way of working going forward, but those collaborative tools are all here to stay as part of that. Indeed, technology requirements have gone beyond these initial use cases to cover other areas including improved cloud integration and enterprise software tools to support the needs of a hybrid workforce; customer engagement; better oversight and control of complex supply chains as well as seamless mobile technology and edge computing. How active has private equity been in fuelling recent transactions? In 2021, private equity (PE) firms continued to show significant interest towards tech firms, given the sector’s resilience and the enhanced demand for digital and SaaS solutions from the enterprise through to everyday lives. Tech businesses are typically fastmoving, and often have significant needs for investment early in their lifecycle. As is common in many sectors, entrepreneurs and owners can be open-minded to receiving external investment to either scale, de-risk, or both. As such, PE has been a very active player in the TMT deals arena. The tech sector in the UK is decentralised – there is a large presence in London (like most sectors) but equally, there are many other established tech hubs in places like Manchester, Leeds, Cambridge and Glasgow, to name a few. These cities act as magnets for institutional investment, and we have seen a significant amount of private equity-sponsored deal activity outside of London. Has there been strong investment from the US? In terms of transactions involving software and technology companies that came to market in 2021, private equity was an extremely active participant. As part of that, more and more in the UK, US PE acquirers are becoming more active and bidding aggressively for high-quality assets, even those that would previously have been deemed too small to garner interest from across the Atlantic. I saw this happen in many of our processes last year, and about a quarter of our deals last year in the sector drew significant minority or majority investment from American investment houses. Are there any particular sub-sectors of enterprise software that have been especially active in terms of deals? Drilling down into the subverticals of enterprise software, we are observing record levels of activity in areas including accounting and financial software, such as the acquisition of asset finance software provider White Clarke Group by Thoma Bravobacked IDS and the acquisition of process automation player Xceptor by Astorg and Corsair Capital. We are also seeing architecture, engineering, construction (AEC) software prove particularly attractive for investors, with deals including the acquisition of NBS by Byggfakta Group and the acquisition of Causeway Technologies by Five Arrows. Other sub-sectors where there have been marked increases in deal activity in the software space include supply chain, logistics and workforce management. My view is that all these areas are where inefficiencies – brought to the fore by the pandemic, Brexit or wider economic factors – have led to an increase in digital transformation and innovation to solve complex issues. Our own experience mirrors these trends; we advised on deals in all these sub-verticals last year.