Who Are The Large Cap Technology M&A Buyers?

If you are running a VC-backed IT software or hardware company, it’s much more likely that the success event for your company will be an acquisition rather than an IPO.  While the folks in the blog universe regularly hear about acquisitions being done by Google, Yahoo, and IAC, I haven’t seen much chatter recently about large cap tech buyers.

Last week at the GrandBanks Capital Annual Meeting, Ryan Moore showed a slide of the 2004 – 05 Technology M&A Deals listed by Large Cap Buyers (Source: Thompson Financial).  The data is instructive and follows:

Tech ma
  • Grammar correction (in honor of Seth Levine), “the data ARE instructive and follow.”

  • I’m not really trying to plug our group but want to make folks aware that of IBDNetwork’s mission to provide forums and resources for corporate development. Just about every month we hold an event about M&A, as well as those tracking early stage companies (e.g., Under the Radar on 5/31). Since acquisition is the favored exit these days, as you’ve duly noted, we aim to provide both buyers and sellers a forum in which to discuss positioning for an acquisition, valuations, partnerships (dating before marriage), and integration.

  • The absoulute number of acquisitions is not all that interesting, in my opinion. There are companies such as Google that will do 5 or so very small acquisitions. Small in terms of number of employees and dollars spent. This usually makes the acquisition easier to digest in terms of integrating people and also emotionally in case it does not work out. Then there are company’s that will do only a few acquisitions, but they are very large and risky. What would be more interesting is to see the total dollars spent on acquisitions as a percentage of the companies revenue. This is a better sign as to how companies are trying to grow themselves and whehter or not it is healthy. I imagine that a company like Sun (with its most recent acquisition) would pop way to the top and Cisco would likely drop considerably.