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CFOs at tech companies expect more M&A activity in year ahead

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The chief financial officers at technology companies expect to increase revenue in 2013 despite the economy, according to the seventh annual BDO Technology Outlook Survey, which was released today. The report outlined the opinions of 100 CFOs at leading U.S. tech companies.

The survey showed 58 percent foresee overall revenue increases of 8.7 percent, an increase of 6.1 percentage points from 2012. Most expect merger activity to remain strong — 60 percent expect an increase and 25 percent expect it will remain at 2012 levels.

“A lot of what is going on in this survey is going on in New Jersey as well,” said Mark Giamo, managing partner with BDO’s New Jersey practice. “Companies are expanding their platforms and looking to grow revenue.”

In the survey, the CFOs say access to technology assets and intellectual property is the primary driver for M&A, followed by revenue and profitability, and lastly by market share. It’s the first time in the survey that technology assets and intellectual property were cited as the primary reason for M&A activity.

“We are at the beginning of a new ecosystem in the tech industry,” said Aftab Jamil, partner and director of the Technology and Life Sciences practice at BDO. “The ‘acquire or retire’ mentality is growing among technology companies, who see acquisitions as a way to enhance their (intellectual property) and gain access to talent that will advance their brand and product portfolio. Acquisitions by Facebook and Google are excellent examples of recent M&A trends that focus on the acquisition of talent and IP as the primary strategic drivers.”

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