Electech Mergers Pushing Innovation

We often share news and talk about energy as well as big data in our articles, as these are two topics that are not only important to our business, but also close to our hearts.

We particularly enjoy news that combine the two and make a connection between energy and analytics – be it smart meters, wearable tech or information collection. This trend is visible industry wide – energy companies big and small have been collaborating with tech companies, but one significant recent development is the popularity of merging with analytics companies specialising in AI and big data.

According to BDO, an international accounting company, mergers and acquisitions (M&A) of this type have doubled over the last year. Their report on the subject states that the value of these deals has also experienced massive growth: where in 2016 the average deal of Q2 was $500m, this year it has grown to $3.5 billion (or £2.6 billion).

This has given a strong platform for “electech”, also known as electricity technology, which is stronger than ever before as a result. Demonstrated through advances in energy storage, production, consistency and battery power, the industry is blooming. This, in turn, creates more competition, which encourages companies to innovate further and come up with fresh solutions that benefit not only the sector themselves, but the consumers as well.

Jakob Sand, partner at BDO, believes this phenomenon is not a momentary event, but will continue to happen in the future. “We are witnessing the early stages of what will become an M&A trend for years to come,” he said. This is partly because of the need of energy companies to be able to predict future demand more accurately and be prepared for it; this leads to them willing to cooperate with companies with expertise in technology.

Whilst many see M&A as a preventive, static move, Dashboard believe that in the context of energy companies working with technology innovators, they are a positive thing. Whilst a fairly recent trend, we think that combining specialists and experts from two fields working on a mutual goal for the same organisation will prove stimulating and strongly support open innovation.