Dealflow: Tech more resilient than pharma

Volume of technology versus pharma deals in Europe

Anneken Tappe
02 July 2012

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While overall activity declined gradually between Q1 2011 and Q2 2012 as macroeconomic conditions worsened, dealflow in the technology sector proved to be much more resilient than pharmaceuticals. This holds for both overall European and country-specific activity figures.

Tech investments saw a slump in Q3 2011, when the overall number of deals almost halved from 59 to 31 transactions in total. But they bounced back in the following quarter and seem to have stabilised at around 40 deals per quarter in 2012.

Volume of technology deals by region

Pharma deals on the other hand show a very volatile investment activity in the different European regions. In Q1 2011, France registered 12 deals in the sector, accounting for the second largest number of deals that quarter, but it registered only two in Q1 2012.

UK investments in pharmaceuticals and biotechnology, however, seem to follow a similar pattern to tech deals: they decreased in Q4 2011 and Q1 2012, but shot back up to a new high totalling 13 deals in Q2 2012. Time will tell if this is a dead cat bounce or if investor appetite for pharma deals in the UK is firmly on the up.

Volume of pharma deals by region

Volatility in sectors that were made out to be safe havens speaks volumes of the cautiousness currently displayed by European investors. However, it could also indicate a shift towards a more opportunistic and deal-by-deal investment policy across the crisis-ridden European continent, resulting in unusual statistical patterns.