If there was one sector that truly dominated the headlines
globally throughout the course of 2014, it was the Information
Technology (IT) sector where a flurry of IPOs and eye-watering
valuations for dotcom businesses spurred talk of a bubble. The
offshore world took its fair share of the action, witnessing 269 IT
deals worth a cumulative value of almost USD60bn. The most notable
was Alibaba Group, the Chinese internet firm incorporated in
Cayman, which listed on the New York Stock Exchange to raise an
eye-watering USD21.8bn in September. That far exceeded the USD16bn
raised by Facebook in 2012.
In all, the offshore jurisdictions witnessed eight technology
deals each worth over one billion dollars in 2014. Four deals,
including the Alibaba IPO, were worth in excess of USD3bn, amongst
them the USD4.9bn acquisition of Oldford Group, an Isle of Man
based computer games firm, by Amaya Gaming Group of Canada.
Another computer gaming firm, Giant Interactive Group of Cayman,
sold to a Chinese investment consortium for USD3bn, and the other
bumper deal saw JD.com, a data processing business, list on the
Nasdaq in May in a deal valued at USD3.1bn.
Of the top 10 offshore IT deals seen in 2014, four were
acquisitions, three were IPOs, and three were capital increases
initiated by the business to bring in more money from shareholders.
Overall, minority stake deals comprised 89 of the 269 technology
deals done, followed by 82 capital increases, 62 acquisitions and
27 IPOs or planned IPOs. The Cayman Islands was the favoured target
of buyers of technology businesses, as home to 116, or 43%, of the
269 deals done, and that jurisdiction also unsurprisingly dominated
by deal value thanks to Alibaba. The Cayman Islands saw an
aggregate technology deal value in 2014 of USD44.6bn, which
calculates as 75% of all technology dollars spent offshore. Hong
Kong performed well in deal numbers, while Isle of Man stood out
for deal value, driven by the Oldford Group deal.
"The Cayman Islands saw an aggregate technology deal value
in 2014 of USD44.6bn."
TOP TEN OFFSHORE IT DEALS 2014
IT SECTOR DEALS BY VOLUME & VALUE 2014
IT SECTOR DEALS BY TYPE 2014
And so are we on the brink of a dotcom crash that will echo the
global collapse in valuations seen at the end of 2000? Opinion is,
obviously, divided. While it is now common for companies with
little or no revenue to be valued at billions of dollars –
think Snapchat, WhatsApp, Instagram and Pinterest –
comparisons with the year 2000 show that the quality, strength and
track records of the majority of technology companies coming to
market now are significantly more robust than they were 15 years
ago. The ability of the sector to cause a global contagion now that
any slump would be largely confined to private markets and a few
large firms with strong balance sheets, is questionable and any
predictions of impending bubbles bursting as they did in 2000, are
probably overstated. We certainly see continued offshore activity
in this space for 2015.
"The ability of the sector to cause global contagion is
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