M&A in the Information Technology Industry: the case of SeSa S.p.A.

In recent years, mergers and acquisitions have become increasingly popular among businesses as a mean to achieve their growth and development goals. However, despite this growing trend, numerous studies and research have not reached a consensus on whether these activities create value. To contribute to the existing literature on this topic, the following work investigates the Information Technology industry, specifically the software subsector, by focusing on SeSa S.p.A., one of the leading companies in this field in the Italian market. With the present work, we want to identify possible trends and characteristics of digital M&A and if these trends have positive results in the company strategy and performance. The primary conclusions drawn from the literature highlight that size, age and correlation of the target company contribute significantly to value generation in the context of mergers and acquisitions (M&A). Notably, the Event Study and Total Shareholders Return (TSR) analysis have yielded intriguing outcomes. Specifically, the Event Study reveals that when comparing SeSa S.p.A. with market indexes, the results indicate that the company has managed to create long-term value for its shareholders, albeit to a modest and statistically insignificant degree in the short term. Furthermore, the TSR analysis demonstrates a comprehensive outperformance of SeSa's returns, with a cumulative return of 881% and a compounded annual growth rate (CAGR) of shareholder return standing at 29%. In comparison, the corresponding index achieved a cumulative return of 445% and a CAGR of 21%, with the closest resemblance in results. This further underscores SeSa's remarkable achievement in maximizing shareholder value.