Contact: Brenon Daly
It’s time to once again hand out our annual award for Tech Deal of the Year, as voted by corporate development executives in our recent survey. For the second straight year, the voting came down to a tight race between two transactions. For 2011, Google’s planned purchase of Motorola Mobility just edged SAP’s reach for SuccessFactors. (Last year, Intel’s rather unexpected acquisition of McAfee slightly topped Hewlett-Packard’s takeout of 3PAR following a drawn-out bidding war.)
Both of the deals in the running for the 2011 prize certainly would have been worthy recipients of the Golden Tombstone. Google’s all-cash $12.5bn purchase of Motorola Mobility is more than the search engine has spent on its more than 100 other acquisitions and, beyond that, stands as the largest tech transaction (excluding telecommunications) since mid-2008. (Specifically, it is the largest deal since HP’s $13.9bn pickup of services giant EDS, which was voted the most significant transaction of 2008.) Meanwhile, SAP is paying an eye-popping 11 times trailing sales for SuccessFactors. With a price tag of $3.5bn, the deal is the largest-ever SaaS acquisition, more than twice the size of the second-place transaction.
Contact: Brenon Daly
This year opened with M&A spending in both January and February trickling along at the low levels it had been since the final months of 2010 – roughly $12-13bn each month. But then, the trickle turned into a flood. (Or at least the closest we’ve had to an M&A flood since the credit crisis.) March set a post-recession record for the value of announced transactions, with the activity staying steady in both April and now May.
The spending total for the just-completed month of May came in at $25bn. That basically matches the total for April, and is twice the monthly level we had been tallying since September 2010. (The record spending in March of $64bn came largely from AT&T’s proposed $39bn purchase of T-Mobile USA, the biggest telco acquisition in a half-decade.) Although smaller than Ma Bell’s move, big deals also helped boost spending totals in May, with two of the four largest tech acquisitions of 2011 announced in the month.
Altogether, M&A spending through the first five months of 2011 has hit a post-recession record of $137bn, putting the year on track for about $330bn in deal value for all of 2011. If we do hit that level, it will actually exceed the full-year totals for the two previous years combined. Spending on tech deals in recession-wracked 2009 totaled just $147bn, and spending only inched up a bit to $172bn in 2010.
2011 M&A activity, monthly
||Deal value, $bn
Source: The 451 M&A KnowledgeBase