Private equity will boost ICT sector within a year
Northern Ireland’s ICT sector is likely to benefit from a major injection of private equity over the next 12 months, according to new research.
Business advisers Grant Thornton surveyed some of the leading private equity firms operating in the ICT sector throughout the UK, and found that 85% of firms that invest in the IT sector have predicted they will make an acquisition in the next 12 months.
A total of 89% of private equity firms identified cloud computing and software as the most attractive investment opportunities, while 40% cited green IT. The findings of the survey are contained in a report ‘Where is the smart money going in ICT?’
Charlie Kerlin, a corporate finance specialist with Grant Thornton in Belfast, said local ICT firms should take advantage of an increase in the availability of private equity to fulfil their growth aspirations. This in turn would have a significant impact in increasing the competitiveness of the Northern Ireland economy.
“The fact is that in Northern Ireland, many of the smaller ICT companies will require private equity if they want to access global markets, particularly if they are seeking to acquire other companies to facilitate faster growth,” he said.
“As this is a sector where private equity finance will increase in the next year, local companies should realise they are an attractive target for UK private equity.”
Dr Ian Graham, chief executive of Momentum said: “This research indicates that ICT firms in Northern Ireland are in a good position to leverage private equity locally and throughout the UK. It also provides an opportunity for companies with growth aspirations to look at private equity as a route to faster growth, particularly for those who find access to traditional forms of finance more challenging.”
The survey also revealed that the impact of the recession on the ICT sector has been tempered by lessons learned, with 64% of respondents noting that firms which experienced the downturn in the sector in 2001 are better placed to weather the current market.