How Megadeals Are Fueling a Hot M&A Market


When it comes to tech industry mergers and acquisitions (M&As) these days, it's all about quality, not quantity: There were significantly fewer tech company deals in the second quarter, compared with the first, but the combined valuation of those deals was higher, according to recent research from PwC. The "U.S. Technology Deals Insights" report indicates that eyebrow-raising "megadeal" announcements upped the stakes. Thoma Bravo's acquisition for Riverbed Technology emerged as the biggest of the big deals. As for hot sectors? Look no further than hardware, which accounted for nearly $10 billion in deals in the second quarter. "To the outside world, deal making in the technology sector can often appear irrational, exuberant and even insane," reads the report. "In what other industry would a five-year-old startup with reported revenues of U.S. $10 million and fewer than 100 employees garner a $22 billion price tag? That's how much Facebook paid in February 2014 for WhatsApp, a messaging service that allows users to exchange text messages without paying for SMS." Research for the report came from data from Thomson Reuters, along with further independent research.

This article was originally published on 2015-09-11