Member Article

The conference, hosted by the International Bar Association, which took place in Barcelona earlier this month, looked at insights into the most important issues and developments in tech Mergers and Acquisitions (M&A) and technology law.

Corporate partners Aleks Bosch and Steve Barnett attended the conference, which is one of the largest and most prestigious networking events for international lawyers, attracting over 400 delegates. Key topics included legal framework for artificial intelligence (AI), sellers’ liability in tech M&A transactions and global trends in technology M&A.

Our key takeaways from the summit

Opening keynote

In the keynote address, Stefani Silverstein, director at Goldman Sachs, delved into the tumultuous landscape of 2023. The year witnessed unprecedented rate hikes and the highest interest rates in decades, which significantly impacted the M&A market, leading to a decline in confidence. However, amidst the challenges, Silverstein remains optimistic about the future.

Silverstein sees a silver lining on the horizon by predicting a robust recovery in 2024. Drawing parallels with historical cycles, she expects a swift rebound from the industry. Whether this be through multiples for tech companies that have returned to pre-COVID levels, where this resurgence indicates renewed investor confidence in the sector. She advised that sponsors still express interest in full equity-backed transactions. However, financing remains a challenge, requiring innovative solutions. She went onto identify AI as the catalyst for the next wave of M&A activity. Similar to the impact of “Mobile” and “SaaS” in previous years, she foresees a tripling of deal volume over a three-to-four-year cycle with early adopters standing to gain the most. As we navigate the financial landscape, Silverstein’s insights provided valuable guidance for investors, businesses, and industry leaders, where the road ahead may be challenging, but opportunities await those who adapt and innovate.

AI

AI is important for the future of the legal field, but there was no clear agreement on how to use it or what it can do. It was evident that those who ignore it will lose their competitive edge, but a vast amount of law firms; traditionally cautious in nature, seem to be waiting for others to 'take the lead'. This approach is consistent with the point raised by James Besley of Google DeepMind, who mentioned the idea that: "...we should not move fast and break things - use the scientific method" in relation to the use of AI and the idea that the "move fast and break things" era is over.  Round table discussions also mentioned the apprehension among associate levels on replacing usual due diligence methods with AI and how this would require a dedicated period of training to use new tools.

Trust

One of the main themes of the conference was “trust”, along with AI. Sabastian Niles, President and Chief Legal Officer of SalesForce, said that trust was a fundamental value for Salesforce and this was reflected in many of the conversations at and around the conference. The need to create trust in AI was also emphasised by Octavia Radulescu, General Counsel of VLex, who suggested that AI applications should be regarded as a firm’s group of associates. AI however is not a replacement for the evaluation of client work – it is a tool that can improve efficiency, but not a substitute for human input. What stood out while listening to each of the speakers, joining round table discussions and networking with delegates, was the importance of relationships and developing a network of reliable contacts. The deal community are dedicated to the smooth delivery of transactions for their clients and need to have trust in those that assist them with that. We need to trust that the advisers we introduce to our clients, have the same dedication to excellent client service and to trust in the tools that they use to provide that service. As much as tech is essential to the delivery of transactions and ignoring it leaves you bound to fall behind, the importance of the human touch should not be overlooked.

Conclusion

The conference revealed that despite global challenges in the market, the UK Market remains strong and appealing after the Brexit changes. There was optimism that signs of improvement in the UK market in 2024 could extend to Europe where a comparable sluggish year has occurred.

The conference revealed that despite challenges in the market, the global experience has been relatively similar with the exception of specific jurisdictions. 2023 presented a tumultuous year for everyone, and the outlook for 2024 is brighter for firms across the globe. Many are experiencing quick deal pullback, and a return to the COVID levels of deal volume. Ultimately, the primary driving force behind this next wave of M&A will be AI.  

 

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