Technology

‘High-tech’ remains predominantly the domain of venture capital, as opposed to buyouts. However, there are pockets of private equity activity, often associated with mature, or cyclical businesses, or software and services businesses characterised by long-term contracts and predictable revenue flows.

Private equity investments in technology companies have either focused on large buyouts of mature, large-scale businesses in semiconductors (NXP and Freescale), or turnarounds of troubled hardware/peripherals makers, often with a strategic partner (such as IBM Personal Computers by Lenovo). At the smaller end of the scale, there have been investments in software companies, particularly in the ERP sector, where recurring revenue streams make leveraged buyouts financeable. Private equity has already played a role in shaping Europe's consolidating IT services landscape, with investments such as those made in Atos Origin, Sema and TietoEnator.