In 2010, technology M&A activity should accelerate as technology firms will look to raise capital, divest noncore assets, wind-down sales increase and acquire rivals to improve competitive positioning.
Interesting Technology M&A data points
§ $1B: this year, only 31 technology transactions valued at $1 billion or more have been consummated. This is less than half the level seen in 2005-2007.
§ 0.9x Revenue: Technology start-up valuation in 1Q09
§ 1.4x Revenue: Technology start-up valuation in 4Q09
Interesting Technology M&A Trends
Footprint extension (i.e., vertical integration; value-chain expansion) continues.
§ Software firms are encroaching in the hardware space (e.g., Oracle purchasing Sun)
§ Computational hardware firms are purchasing technology services assets (e.g., Dell purchasing EDS)
§ Services firms investing in software assets (e.g., Cognizant’s Master Data Management software product)
§ Networking firms investing in computational hardware (e.g., Cisco’s server blade)
Source(s): NYT, 451 Group