IT services M&A records 449 deals worth $14.8 billion in H1 2026

New Delhi, Aug 12 (IANS) IT services mergers and acquisitions (M&A) activity recorded 449 deals worth about $14.8 billion in the first half of 2026, with cloud, data and analytics, cybersecurity and managed services leading deal activity, a report said on Wednesday.

Despite softer discretionary spending, macroeconomic uncertainty and AI-led disruption, IT services M&A activity remained resilient in H1 2026 as artificial intelligence shifted buyer priorities toward scale, sector depth and ecosystem strength, the report from EY India.

The report forecasted IT services M&A activity to remain active but selective through the remainder of 2026.

“Private Equity platforms from the 2020–22 period are entering their exit phase. Assets demonstrating scale, vertical specialization, ecosystem relevance and resilient standalone economics are expected to remain best positioned to attract buyer interest,” it said.

Healthcare and financial services-focused firms are expected to remain particularly attractive acquisition targets, given the growing importance of sector expertise in regulated industries and AI-enabled transformation programmes.

Deal volume in H1 2026 was broadly in line with the 456 transactions in H1 2025, while deal value was concentrated in seven large transactions. Excluding these transactions, disclosed deal value stood at approximately $4.5 billion, reflecting a healthy but more selective market environment.

The report said that strategic buyers continued to pursue large acquisitions to expand scale, strengthen geographic reach and deepen sector capabilities. Meanwhile, private equity investors remained active through platform-building and consolidation strategies focused on niche, founder-led businesses across the US and Europe.

Strategic buyers accounted for approximately 47 per cent of deal volume, while PE-backed roll-up transactions and direct private equity investments represented 36 per cent and 17 per cent, respectively.

“While AI is shaping virtually every acquisition discussion today, buyers continue to focus on fundamentals such as client relationships, sector expertise and delivery scale,” said Shivani Nagpaul, Partner, Investment Banking, Technology, EY India.

“These capabilities are increasingly being evaluated through an AI lens, as companies position themselves to compete for large-scale transformation programmes. Buyers remain willing to invest behind strategic assets, but only where the business case and long-term economics are compelling,” Nagpaul added.

Cloud services, data and analytics, cybersecurity and managed services providers continued to dominate deal activity in H1 2026.

Large and mid-sized IT services companies pursued acquisitions to strengthen client relationships, expand capabilities and enhance their positioning for large AI-enabled transformation mandates. Indian and global buyers announced acquisitions across healthcare, cloud, AI infrastructure, cybersecurity, data and engineering services.

—IANS

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