A rush to gain exposure to the AI boom, with investor interest in digital infrastructure and software, fueled a 2024 comeback in IT M&A.
In 2024, IT deal value reached $740.7 billion, up about 46% year-over-year, and comprised almost 21% of all global M&A value, second only to B2B, according to PitchBook’s 2024 Annual Global M&A Report.
“There’s an insatiable demand for data center capacity,” said Gregory Williams, who leads KPMG’s asset management and building, construction and real estate practices. “The speed of our movement into generative AI isn’t going to slow down.”
Williams said he expects PE and institutional investors to continue to commit capital to data center projects in the near future. For those investors who don’t already have dedicated allocations to the space, Williams anticipates more co-investments alongside seasoned players. For firms with maturing assets, he foresees some large exits in the space in the mid-term.
“There are only a few public companies in this space, so there’s room in the public markets to exit,” he said.
In September 2024, for example, Blackstone, along with the Canada Pension Plan Investment Board, acquired Asia-Pacific-based data center platform AirTrunk from Macquarie Asset Management at a valuation of over A$24 billion.
Also last year, Vanatage Data Centers raised $9.2 billion of new equity from a coalition of four PE firms, including DigitalBridge Group and Silver Lake, to advance its development of data centers for AI and cloud workloads.
In addition to data centers, deals involving software companies that support AI development also contributed to the tech dealmaking rebound. Software PE deals skyrocketed in 2024, reaching $134.8 billion in total deal value in the US alone and representing a 32% bump YoY, according to PitchBook’s 2024 Annual US PE Breakdown.
In fact, seven out of the top 10 largest deals in the US last year were buyouts of software companies.
The largest transaction in IT was AI-focused German engineering group Siemens’ $10.6 billion acquisition of Altair Engineering, an engineering software company with capabilities in high-performance computing and AI.
PE-backed technology deals rebounded strongly in 2024, after a relative slump on the back of limited exits and a valuation correction. The IT sector, in particular, helped prop up overall PE M&A activity, as its total deal value climbed above pre-pandemic years.
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