In the first quarter of 2012, 248 middle market transactions were closed worldwide in the Information Technology (“IT”) industry. Transactions valued at less than $100 million represented approximately 80% of these deals.

One reason for a large percentage of the deals occurring in the lower middle-market is industry consolidation, and the need for companies to stay competitive. In February, Juniper Networks purchased Mykonos Software for $80 million to enhance its security offerings and stay competitive with companies such as Palo Alto Networks.

Another reason is because larger companies are eager to expand into related markets, and they are doing this by acquiring small, well-established companies. In January, AT&T purchased SuperClick for approximately $15 million to grow its presence in the hotel Wifi market. As this space becomes increasingly popular, AT&T looked to acquire a company with robust technology and many well-known clients. Superclick’s clients include Four Seasons Hotels, Jumeirah, and Marriott Hotels International, among many others.

These trends are prevalent not only in IT, but also across most other industries. Furthermore, with the continued acceleration of the U.S. GDP at the end of 2011, along with the optimistic economic data, we expect the number of middle market transactions to continue to increase in 2012.