Contact: Brenon Daly
The largest-ever SaaS deal, a trio of billion-dollar blockbuster chip transactions and big-spending buyout shops all helped push tech M&A spending in July to its highest monthly total since last fall. Across the globe, acquirers spent $91bn on tech deals in the just-completed month, including a dozen transactions valued at more than $1bn, according to 451 Research’s M&A KnowledgeBase. That’s about twice as many ‘three-comma’ deals as we would typically see in even a banner year for tech M&A.
And, until this summer, no one would have characterized 2016 as a banner year. The relatively paltry amount spent on transactions announced in the first five months of the year had put 2016 on track for less than half last year’s amount. However, spending surged in June to $67bn, roughly triple the average from the previous five months, and then soared another $24bn higher in July.
July’s M&A fireworks came in a number of tech markets:
- SoftBank’s unexpected $32.4bn purchase of ARM Holdings stands as the second-largest semiconductor deal in history, trailing only Avago’s $37bn reach for Broadcom last year.
- Oracle paid $9.3bn, or 11x trailing sales, for NetSuite, making it the largest acquisition of a subscription software vendor ever.
- Verizon announced its biggest non-telecom transaction, spending $4.8bn for most of the (faded) Internet properties of Yahoo.
- Relative newcomer Siris Capital bought videoconference equipment maker Polycom for $2bn, which is more than the buyout shop had spent on its previous four deals combined.
The summer surge in M&A comes as US equity markets also moved higher, with some indexes hitting record levels. (The Nasdaq, for instance, soared 7% in July.) Overall, this summer’s dramatic acceleration in M&A spending has put 2016 back on track for a strong year. With seven months now complete, the value of acquisitions announced so far this year tops $272bn – already putting 2016 ahead of the full-year totals for five of the seven years since the recent recession ended.
