M&A Consolidation Continues to Alter the Tech Landscape
Tech Deals Rebound
Technology transactions increased 97% in value in Q3 to $27.7 billion from $13.9 billion in Q2.
A Return to 2012 Levels
The number of U.S. tech deals in Q3 2013 increased to 63 from 32 in Q2 2013 and 60 in Q3 2012.
Shifting Cloud Portfolios
Some of the largest transactions in Q3 were in the cloud space: Salesforce.com’s acquisition of ExactTarget and IBM’s acquisition of SoftLayer Technologies.
Software Deals Triple
The software sector led in deal activity in the third quarter, after a slump in the second quarter. Deal value increased 716 percent in Q3 vs. Q2, and transactions in the latest quarter accounted for 38 percent of the total volume and 45 percent of the total deal value.
Billion-Dollar Buys
Several IT deals in Q3 exceeded the billion-dollar mark, including Microsoft’s proposed $5 billion buy of Nokia’s Devices and Services business, and Cisco’s agreement to acquire Sourcefire for $2.7 billion.
Doubling Down
The number of IT service deals doubled in Q3, with deal value increasing 758%, primarily driven by two deals in excess of $1 billion.
No Slump in Hardware Deals
The volume of hardware transactions increased 25% while the value of those deals increased 77%, reaching $5 billion.
Internet Transactions Take a Hit
Internet deals in the Q3 remained flat, with total deal value dropping. Only one deal in excess of $1 billion closed in Q3.
Private Equity Continues to Play in the Tech Sector
Private-equity funds acquired five companies in Q3 2013 and backed another 12 companies with acquisitions.
Deal Makers
Acquisitions announced by Apple, Broadcom, EMC, SAP and others indicate a rising trend in M&As in the tech sector.