Roll-Up Strategies in the Canadian ICT Industry
Various companies in the Canadian market focus on a Mergers and Acquisition (M&A) roll-up strategy, concentrating their efforts within the Information and Communication Technology (ICT) industry.The ICT industry encompasses various technologies and services related to information processing, communication, and data management. It plays a crucial role in modern society and business, driving innovation and enabling the exchange of information globally.
Core components include cybersecurity, data management, digital media, electronics, hardware, internet services, IT services, networking, software, and telecommunications.
In this report, we provide a brief overview of the ICT industry and companies in Canada that are executing an M&A roll-up strategy as part of their core business strategy.
REPORT HIGHLIGHTS:
(1) Despite the COVID-19 impact, the global ICT industry was resilient. Estimated worldwide ICT spending in 2023 is estimated at US$4.8 trillion. Canada has a robust ICT sector and it is expected to reach $270 billion in revenues in 2023, growing 5% annually.
(2)A roll-up strategy within M&A aims to consolidate businesses in the same sector, enhancing efficiency, competitiveness, and scale.
(3) Post-COVID-19, M&A activity in Canada saw a resurgence in 2021, recording over US$349 billion in deals, a yearly jump of over 135%.
(4) Early 2023 showed a dip in M&A deal value due to economic uncertainties, but the second quarter of 2023 showed improvements.
(5) In Canada, there is a potential for increased M&A activity influenced by technological demands and the aging demographic of Canadian entrepreneurs.
(6) Public companies mentioned in the report include Ciscom, CGI, Constellation Software, Converge Technology, Descartes, Docebo, Dye & Durham, Enghouse, Kinaxis, Lightspeed, and Open Text.
(7) The report highlights Ciscom (CSE: CISC) which recently went public and focuses on acquisitions in the ICT sector. Ciscom completed its first two acquisitions in 2022 and is expected to book at least $35 million of revenue in 2023, up from $14.8 million in 2022.
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