It used to be said that the business of business is sales. It is now apparent that there is no business without technology. JL
Joe McKendrick reports in Forbes:
The lines between between industries as well as non-tech and tech companies continue to get blurrier. With the ubiquity of cloud and big data, with the Internet of Things becoming interwoven through it all, M&A has been buzzing. Companies with digital disruption stories — particularly IoT, big data analytics and cloud or Software as a Service — were the stars
In the process, non-tech companies continued to get involved in tech in a deeper way. At the same time, tech providers were shifting away from products to end-to-end services. That’s the finding of EY’s latest review of global M&A activity. Overall, the consultancy tracked a total of 1,069 deals in the third quarter of 2015 (July-September). The amount of deals set the second-highest all-time record for any quarter since 2000. The data is based on EY’s analysis of The 451 Group M&A KnowledgeBase data for 2014 and 2015.
However, the overall value of the deals was down, the report adds. Aggregate value of fell 49% the second quarter, totaling $65.4 billion. But it still ranked as the ninth-highest quarterly total since 1996, the earliest year for which data. is available.
The biggest deals in terms of money exchanged were driven by the IoT, big data analytics, and payment and financial services technologies, EY concludes. IoT topped the chart in average value per deal in the third quarter, averaging about $1.2 billion. Big data analytics also was behind the most lucrative deals, close to $800 million each, on average. “More tech and non-tech companies appear to be pursuing the technology to help monetize data assets that have not heretofore generated revenue,” according to EY.
In terms of quantity, more than 350 of the deals tracked related to cloud/SaaS, while more than 200 were driven by smart mobility. Another 100 or so deals were connected to big data analytics.
There was a continuing blurring between tech and “non-tech” companies. Non-tech buyers acquired the top-value IoT, mobility and security deals; tied for the top-value big data analytics deal; and had the second-largest deals in advertising and marketing and payments and financial technologies, EY states. The four top non-tech buyers included Honeywell, Audi/BMW/Daimler, Liberty Interactive and McGraw Hill Financial. During this quarter, non-tech buyer volume increased to 151 deals, or 14% of the total. So far in 2015, non-tech buyers have accumulated $47.1 billion in disclosed-value tech deals, nearly double (+97%) their full-year 2014 total ($23.9 billion).
The EY report even suggests there is competition brewing between the IT and automotive industries. “Among deals already mentioned, the acquisition of Nokia’s mapping business is particularly notable for the intensity of competition already emerging between the technology and automotive industries — companies from both reportedly bid for the deal,” the report’s authors state. “High-precision maps are considered critical to the anticipated era of self-driving cars.”There is also a growing diversity taking place involving IoT. “Previous big-ticket IoT deals have been mostly confined to the semiconductor segment,” EY notes. “But in 3Q15 targets in IoT deals worth more than $1 billion included CPE, software and semiconductor companies, as IoT solutions expand across industries and the technology stack.”
Here are the top five deals for the third quarter of 2015:
- The Carlyle Group and GIC Private and Veritas information management business division from Symantec Corporation ($8 billion)
- Honeywell International Inc. and Elster Group GmbH ($5.1 billion)
- Fidelity National Information Services, Inc. and SunGard Data Systems Inc. ($5.1 billion)
- Dialog Semiconductor Plc and Atmel Corporation ($4.6 billion)
- Vista Equity Partners and Solera Holdings Inc. ($3,7 billion)
- AUDI AG/BMW Group/Daimler AG and HERE (fka Nokia Maps, owned by Nokia Corporation) ($2.7 billion)
- Liberty Interactive Corporation and zulily, Inc. ($2.4 billion)
- McGraw Hill Financial Inc. and SNL Financial LC ($2.2 billion)
- SunEdison, Inc. and Vivint Solar, Inc. ($2.2 billion)
- Digital Realty Trust, Inc. and Telx Group, Inc. ($1.9 billion)
