Contact: Brenon Daly
There’s yet more proof that the M&A market is back. No, we’re not talking about the fact that April boasted the highest monthly deal spending since June, with some $21bn worth of announced transactions. We’re referring to something that’s far less quantitative: deal whispers.
Indeed, the traffic in M&A rumors has grown substantially in recent weeks, and many big names are popping up. It may just be a byproduct of the resurgent Nasdaq, which has risen one-quarter in value over the past two months. But it’s nonetheless worth noting that there’s M&A buzz once again, even if some of the gossip strikes us as highly unlikely.
For instance, last week saw reports of QLogic attracting interest from EMC. We have a hard time understanding why EMC would want to be a storage networking company, particularly when it’s been tightening its relationship with networking powerhouse Cisco Systems. Nonetheless, the market was kicking around that possible pairing as Broadcom was pushing its unsolicited offer for QLogic rival Emulex. (Of course, QLogic was in the market last week, but on the buy side. It picked up seven-year-old startup NetXen for $21m. QLogic says NetXen, which generated essentially no revenue over the past four quarters, will contribute $5m in sales in the coming year.)
And then there were whispers of a deal that we suspect is even more of a long shot: the word was that BMC may be looking to snag SolarWinds before the latter goes public. However, that rumored pairing seemed unlikely from the start. We wonder, for instance, how BMC, which targets big-ticket sales at large enterprises, would have much success selling SolarWinds’ inexpensive, downloadable software. (The average license sale at SolarWinds is less than $6,000.) Still, it’s worth noting that it has been some time since we heard the term ‘dual-track,’ even if that’s almost certainly not the case with SolarWinds.