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Size Analysis: During the quarter, the market capitalization increased to $6.9 trillion, although it has yet caught back up to the levels observed in 2022 Q1. Notably, approximately 132 companies exited the public company space during the quarter. While the number of transactions in the industry declined, the cumulative transaction value increased relative to 2023 Q1.
Public Market Dynamics: Industry performance has shown consistent improvement since 2022 Q3 but has continued to underperform the market (SPX). The top 20 companies in the industry have outperformed the market. The debt-to-equity levels experienced a slight increase to 10.89% over the quarter, although the interest expense-to-revenue ratio remained constant. Gross profit margin and operating expenses as a percentage of revenue increased over the quarter, while the net profit margin declined.
Transaction Trends: A total of 3,392 transactions were recorded, with the transaction value increasing to $119 billion, although the number of transactions decreased. M&A transactions decreased over the quarter and have been on a decline since 2021 Q4. Private placements also declined relative to the last quarter, while public offerings increased compared to the past quarter.
Dispersion Insights: The major contributor to revenue was North America, followed by Asia and Africa. M&A activity was highest in North America, followed by Europe and Africa. There were more private placements relative to public offerings, with North America and Asia leading in private placements. In the case of public offerings, North America and Asia were the major contributors.
We screened CapitalIQ using its industry classification. Transactions were filtered by announce date within the last 3 years. Companies were filtered by having a public company type. The main industry selected was "Information Technology". CapitalIQ sector "Software and Services" was used to screen the database. CapitalIQ subsectors "IT Services" and "Software" were used as categories. Our sectors were defined by the CapitalIQ primary industry classification.
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