IT services M&A records 449 deals worth $14.8 billion in H1 2026
New Delhi, Aug 12
IT services mergers and acquisitions 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
Reader Comments
The PE exit phase from 2020-22 is interesting. Many startups were valued too high back then, and now we're seeing the reality check. But it's good that buyers are being selective - quality over quantity! 😊 Hope this translates to better job stability for IT professionals.
I'm curious about the AI angle here. EY says AI is shaping every acquisition discussion, but buyers still focus on "fundamentals." So what's really changing? Is it just buzzword compliance or genuine transformation? I'd like to see more clarity on how Indian firms are actually leveraging AI in their services, not just acquiring AI startups for the sake of it.
These numbers are impressive, but I wonder about the Indian IT job market. With all these M&As and consolidation, will we see more layoffs or more hiring? The report says strategic buyers are expanding scale - let's hope that means more opportunities for Indian techies 🇮🇳
The cloud, data analytics, and cybersecurity focus is spot on. These are the pillars of digital transformation. Being in this industry, I see how companies are desperate to build these capabilities. But I hope Indian companies don't just become acquisition targets for foreign firms - we should also be acquirers, building our own global footprint!
"Soft discretionary spending" yet $14.8 billion in deals - that's quite a contrast! The Indian IT sector is clearly becoming more strategic about investments. EY's point about regulated industries like healthcare is crucial - if you can crack that domain, you're in for the long haul. Good analytics.