Amid the rapidly shifting sands of business, the technology sector saw a flurry of mergers and acquisitions in 2015. The niche recorded a massive spike of 82 percent over M&As in the last year and saw transactions worth a total of $313 billion.
However, the numbers are a bit less impressive when you consider the deals that were actually closed. Out of the $313 billion, only 278 transactions with a net worth of $147.7 billions were actually concluded — Less than the 289 sealed deals in 2014 that were worth a total of $164.8 billion.
The difference between the deals that were initiated and that actually saw the light of the day can be attributed to the tumbles suffered by the stock market in the fourth quarter.
Value wise, 2015 was witness to the announcement of 15 deals worth over $5 Billion while over 69 percent of the total M&As were composed of about 30 deals with $1 Billion+ values each. The largest deal of last year — and of history, for the technology sector — also took place last year, as Dell acquired data storage behemoth EMC in a deal valued at $67 Billion.
The large number of deals meanwhile, stemmed from the fact that choppy business waters forced many small companies to band together — particularly in the software sector for niche and in China, from a demographic perspective.
The fact that 2015 saw a literal revolution in the SMAC — Social, Mobile, Analytics, and Cloud — also drove mergers as tech companies resorted acquisitions to scale operations, develop domain expertise or simply grow. The effect of the growth of SMAC was also visible in other associated sectors including Cloud, Internet of Things, ecommerce, and data security, which also saw a slew of deals.
The semiconductor sector also saw a significant consolidation drive and managed to generate the most deal value. Some of the most important deals of the niche included Intel’s $16.7 Billion acquisition of rival Altera.
Meanwhile, the US saw a influx of cash with foreign acquirers leaving U.S. technology companies behind in acquisitions. Companies from abroad managed to invest almost 69 percent more capital into the US than what the US based companies invested abroad.
Well, last year was certainly turbulent with regards to the fortunes of companies as shifting trends forced many to sell out to competition in order to make an exit. However, the same M&As were also responsible for consolidation and formation of stabler and more powerful entities. Meanwhile, the trend is expected to continue and with the opening up of little known categories including IOT, AI and their intersecting paths, 2016 is expected to match — if not actually surpass — 2015 as far as mergers and acquisitions are concerned.