Proceedings of The 6th International Conference on Advanced Research in Management, Business and Finance
The Upside Down World of Value Capture. Do Companies in Technology Sector Follow the Principles of Profitable Growth?
Dr. Veronika Vinogradova
The paper investigates whether the strategic deals, which have been driving the technology sector over the last decade, can be considered value-creating and had a positive impact on the acquirers’ long-term financial performance. The results of the analysis show that overall, the acquiring companies could not achieve profitable growth and fully capture value and the benefits of M&A. The acquirers showed rather a deterioration in post-acquisition profitability, efficiency, and growth. The focus (international and industrial) was associated with the best results in terms of both, profitability and growth, while the largest increase in post-event growth rates was achieved by the companies from the emerging markets.
keywords: Growth strategy, Technology sector, Corporate M&A, Profitable growth, Shareholder value creation, Valuation