Shaking off the dog days of summer

by Brenon Daly

Even deep in the dog days of summer, tech dealmakers stayed busy. This month, they’ve put up the second-highest monthly total of billion-dollar deals in 2019, helping to boost overall spending on tech acquisitions in August to unseasonable heights for the late-summer month. The $48bn tallied in 451 Researchs M&A KnowledgeBase for the current month stands as a record level for any August since the recession a decade ago. Deal volume in August also hit its highest level of any month so far this year.

Looking more closely at the top end of the M&A market, this month’s parade of big prints has included virtually all the strategies available for doing deals valued in the billions of dollars: low-multiple buyouts by private equity players; consolidations in both mature and emerging markets; and growth-oriented expansion by the well-known and well-capitalized ‘usual suspects’ of tech M&A. Among the transactions that have stood out this month:

In the largest-ever information security (infosec) acquisition, Broadcom said it will pay $10.7bn for the enterprise security business of Symantec. Our M&A KnowledgeBase shows that single deal just about equals the value of all infosec transactions in a typical year, although annual totals do tend to bounce around a bit.

VMware also did its part to add a large chunk of change to this year’s already-record level of infosec M&A spending. The infrastructure technology giant handed over $2.1bn for endpoint security vendor Carbon Black, its first billion-dollar deal in more than a half-decade.

Nearly tripling the size of its largest purchase, Splunk announced its $1.1bn purchase of SignalFX. The acquisition comes as a pair of the targets rivals in the infrastructure monitoring market have headed to Wall Street in highly valued IPOs.

With the unusually strong August spending, the value of tech deals around the world announced so far this year totals $337bn, according to our M&A KnowledgeBase. Assuming the current pace holds for the rest of 2019, full-year spending would slightly top $500bn. That would rank 2019 as the third-highest total for any year since the internet bubble burst almost 20 years ago.

Figure 1: Tech M&A activity
Posted in M&A