Contact: Ben Kolada
Bay Area buyers have roared back to life in 2010. Compared to the same period a year ago, Bay Area buyers’ deal volume has increased 46%, while at the national level M&A has risen only 21%. Year-to-date, Bay Area-based acquirers announced 230 transactions, 19% of all technology deals undertaken by US-based companies. Further, these companies represent 19% of the total declared deal amount, including four of the 18 billion dollar-plus transactions made by US-based buyers. In the same period last year, Bay Area acquirers did only 162 deals.
So, what’s up with the Bay Area? Our data suggests that 15 big serial acquirers accounted for most of the increase. In fact, the number of Bay Area buyers acquiring three or more companies increased five-fold in 2010, compared to a 50% increase at the national level. After waiting on the sidelines in 2009, these companies have resumed M&A activity in full force. As a group, they bought 52 more companies in year-to-date 2010 than they bought in 2009. (An interesting note, Internet content providers were the preferred targets across the board, representing 22% of acquired companies at both the Bay Area and national levels.)
M&A activity by Bay Area buyers
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Source: The 451 M&A KnowledgeBase, 451 Group research
Google is the poster child for Bay Area M&A. Year-to-date, the company has been involved in 15 transactions – the most since it inked the same amount of deals in full-year 2007. However, the search giant is noticeably absent from the 2009 ranking. Even though Mountain View, California-based Google had $8.6bn in cash at the end of 2008, the vendor took nearly a year-long break from M&A activity. Google’s M&A drought began after it acquired TNC in September 2008 and ended 11 months later, when it announced its first purchase of a public company – On2 Technologies – in August 2009.