There has already been over $800B in acquisitions this year. An incredible amount of money and stock is changing hands, with price tags that will boggle your mind.
M&A has been changing. Huge deals are becoming the norm. If you thought a $5B valuation was big, that’s now just play money. We’re also seeing some notable deals emerge as incumbents reshape their entire DNA and startups go on buying sprees of their own to supersize themselves.
Here are some of the companies doing acquisitions to watch now.
Google is not only the big dog on the block in search, but continues to prove it’s buying power.
Between the recent $1.1B acquisition of HTC’s design team, billions spent on offices in NYC, and new $2.6B purchase of analytics platform Looker, you’d think $1B was the new minimum price tag for anything to catch their eye.
From a startup’s perspective, Google is not only an active acquirer but a very desirable partner in an exit. Of all the founders with great exits that I’ve interviewed on the DealMakers Podcast, those that have sold to Google continually praise it for how fast, professional and organized they are. That can be just as valuable the price you are offered.
When getting acquired by a company like Google storytelling is critical for a transaction to happen and having a solid acquisition memorandum that captures the essence of the business is key. For a winning acquisition, memorandum template take a look at the one I recently covered (see it here) or unlock the acquisition memorandum template directly below.
Not the biggest deal of the year, but McDonald’s recent $300M acquisition of Dynamic Yield, followed by taking a 10% stake in Plexure is notable.
Their purchase of Dynamic Yield is the largest they’ve made in 20 years. The deep dive into app development, AI and machine learning show they’re serious about staying relevant and modern business.
Salesforce is a force to be reckoned with when it comes to acquisitions.
They’ve already been involved in at least eight deals since 2018. These include, CloudCraze, Mulesoft ($6.5B), MapAnything, Rebel Mail, and Griddable.
The most recent is the acquisition of data firm Tableau. A deal worth $15.3B.
IBM’s acquisition of Redhat is is a big deal for two reasons. One the size, at $34B. Secondly, the fact it paid a 63% premium. Still, IBM’s CEO seems excited at the deal, citing the huge opportunity that only 20% of enterprise-level workloads have moved to the cloud so far.
There is a lot of competition for this space, but a trillion-dollar pie to be split up.
Amazon spent a modest $1.65B on acquisitions (including Ring and PillPack).
That’s after quite a busy prior year, with the $13.7B purchase of Whole Foods. However, Amazon kicked off 2019 strong, with an average of one acquisition per month by mid-year.
That includes the $250M purchase of CloudEndure in January and Eero for $97M in February.
Apple made 10 acquisitions this year. Accounting for 10% of all the acquisitions it has made since 1988.
Last year these M&A deals incorporated digital magazine subscriptions, holographic, and AI.
Apple seems to have had a slow start this year, with just the acquisition of Italy based Stamplay for just $5.6M. That could suggest much bigger things are in the works for the second half of the year.
7. Bristol Myers
Bristol Myers acquisition of Celgene for $88.3B certainly sets a big benchmark for those hoping to exit or make newsworthy acquisitions, and that was announced on January 3rd.
It’s one of 20 acquisition deals, though the largest since the 2015 purchase of Cardioxyl for $2B.
After failing to close the epic purchase of Qualcomm for $100B, Broadcom is reportedly set to go on a spree to buy a larger number of smaller companies.
Well, perhaps not that small given its recent acquisition of CA Technologies for $19B.
Uber is a great example of startups getting big fast by buying other startups. Just prior to its IPO, it announced the planned acquisition of competitor Careem for $3.3B. A deal not expected to close until next year.
10. Fidelity National Information Services
Fidelity has iced its list of 26 acquisitions with the $41B purchase of WorldPay.
According to Deloitte’s annual M&A activity study, 73% of tech sector executives expect even bigger deals this year. That is a very bullish outlook. Though they may not be disappointed given the failure of another grim recession to yet show up in the data.
While the IPO market could see more debuts this year, the issues plaguing Uber and Lyft could redirect others to pursue being acquired as a more attractive option. There seems no lack of appetite for purchasing companies, even at substantial premiums. Not all will be this grand.
The average deal size still being around just $100M. Yet, that can still be a life-changing payday for many founders, and the chance to either leverage the resources of a larger acquirer to scale that business or move on to start something new from scratch.
If you are looking to get your company acquired and run a successful M&A process, a great acquisition memorandum template like the one below should provide the right guidance so that you build your own and make all the difference.