Further, the sector is "yet to see its peak" and is on track to surpass the 711 tech M&A deals completed last year in the UK.
The figures, published by ICON Corporate Finance Limited, show the consolidation in the market to be driven by digital transformation and lockdowns, which have "created a plethora of new digital solution providers that are grabbing the attention of overseas PE backed acquirers".
Further it said UK communications providers "are proving flavour of the month as PE houses look to buy, build and eventually sell". Combined with acquirers looking to gain on the competition and generate new revenue streams, the result has been "valuations rising to near record levels".
Last year a record-breaking 48% of all UK deals involved cross-border backing, a figure which could yet be surpassed in 2021.
Brian Parker, head of M&A at ICON Corporate Finance, said: "It's remarkable that this quarter was the busiest ever, given lockdown 2.0. It’s another great example of digital acceleration improving productivity, with record numbers of deals closing, despite buyers and sellers not being able to meet."
On the industry's most notable deals, ICON listed the acquisition of Mission Labs by UK listed Gamma Communications, for an initial consideration of £40 million, as well as Onecom's takeovers of both Olive Communications and then 9 Group. Onecom claimed these deals would make it the biggest B2B mobile, fixed-line and cloud specialist in the UK, providing services to more than half a million corporate and business end-users this year.
The acquisition followed a £100 million investment in Onecom from mid-market private equity firm LDC in 2019 to fuel growth and will take reseller revenues beyond £150 million.
The first quarter also saw Content+Cloud (ex ITLab) make its fifth acquisition, buying Microsoft-focused unified comms specialist Sipcom.
