In the fast-moving digital media and frontier technology sectors, where incumbents are under constant pressure from evolving technologies and emerging competitors, M&A often represents the best way to capture or retain market leadership.
Nevertheless, the dealmakers surveyed in this report are acutely aware of the risks they face. One danger is being late to an opportunity or emerging growth area. Speed to market has become one of the biggest indicators and measures of success in this market. Another danger is completing a deal with the wrong company. There is a tightrope to walk between success and failure, but those who have taken the time to structure a thoughtful strategy in advance will have the best chance to thrive.
Alongside this danger sits execution risk—the danger that dealmakers will make the wrong strategic decisions for their businesses, or that due diligence or integration failures will jeopardize the potential value of a transaction. While this risk exists with any type of M&A, the rapid pace of change in the media and technology sectors often forces dealmakers to act at speed, leaving them more vulnerable to such setbacks.
The message of this research is that, while the technology and media sectors offer exciting M&A opportunities—and dealmaking will often be essential as businesses seek to monetize their existing assets or to retain market leadership—those dealmakers that fail to pay attention risk being left behind. They should therefore be mindful of a number of key lessons: