||By Kevin Dee, Co-Founder of Eagle
This post first appeared on the Eagle Blog on March 5th, 2020
This is my 30,000-foot look at events in the Tech industry for February 2020. What you see here is a précis of the monthly report I produce, which will be available in more detail at the News section of the Eagle website, where you will also find back issues.
A Little History of previous year’s Februarys …
Five years ago, in February 2015, we saw the $6.3 billion merger of Staples with Office Depot and the $1.6 billion purchase of Orbitz by Expedia. There was a big buy in the communications and IT space with Harris paying $4.75 billion for Excelis to establish a 23,000 person company. There was a big data center play with UK-based Telecity Group paying $2.2 billion for Interxion Holdings. Microsoft made a couple of acquisitions, paying $200 million for pen-tech maker N-Trig and $100 million for mobile calendar company Sunrise. Samsung bought a mobile payment company (competing with Apple pay), LoopPay. Also out buying was Twitter, which picked up Niche, a network of social media creators. There were a number of interesting deals in Asia, including Sapdeal buying luxury fashion estore Exclusively; Foodpanda made six acquisitions of online meal delivery services to establish itself as a powerhouse in that space. Australian job board OneShift bought Adage, which is a job board serving people over 45.
In February 2016, the biggest deal saw HNA Group of China pay $6 billion for Ingram Micro. Two other billion dollar deals included Cisco paying $1.4 billion for IoT company Jasper Technologies and a consortium of Chinese internet firms making a $1.2 billion bid for Opera. Microsoft was busy with a couple of acquisitions, Xamarin a cross platform mobile application development company, and Swiftkey which produces predictive keyboard technology. Another busy company was Alibaba Group which was investing in a bunch of companies, including a $100 million investment in Groupon, and smaller investments in microblogging site Weibo; software company Momo; augmented reality startup Magic Leap; Chinese retail chain Suning; and Singapore telco SingPost. Other companies of note out buying included IBM who bought digital agency Aperto and Blackberry acquired cybersecurity company Encription.
Three years ago, in February 2017, there was very little M&A action. Nokia paid $371 million for Finnish telecom software company Comptel, as it reinvented itself, and Apple picked up an AI startup company RealFace.
February 2018 was a very active month in M&A. There was more consolidation in the telco space with US-based GTT paying $2.3 billion for London headquartered Interroute, thus expanding its global footprint. Security companies were a theme this month and you will spot several in the following list. Cybersecurity firm Phishme was bought with $400 million of private equity money; Splunk paid $350 million for Phantom Cyber Corp; and Proofpoint paid $225 million for Wombat Security Technologies. Other deals saw LogMeIn pay $342 million for Jive Communications; Carbonite pay $146 million for Mozy; and Red Hat pay $250 million for Core OS. Some of the household names that were also out making deals included Oracle, Google, Opentext, Avaya and Citrix.
Last year, February 2019 was a relatively busy month in M&A but there were no blockbuster, billion dollar deals. The biggest deal I saw was Carbonite’s $618 million acquisition of internet security company Webroot. Palo Alto Networks seemed to be on a buying spree, closing two deals this month, $560 million for analytics company Demisto and $170 million for cloud security startup, RedLock. The money guys were out shopping too, with Thoma Bravo paying $270 million+ for MSP platform company Connectwise and Trive Capital paid $330 million for Windstream’s Earthlink telephone service provider assets. Spotify announced its podcast intentions with a couple of acquisitions, Gimlet Media and Anchor, and Witricity strengthened its hand in the wireless charging space with the acquisition of Qualcomm’s Halo business unit. There were some big names out shopping too, including Microsoft who picked up Datasense in the education space; Amazon picked up eero in the home automation world; DXC picked up EG A/S a services company in Europe; and Semantec bought cybersecurity startup Luminate Security.
Which brings us back to the present …
February 2020 was a relatively quiet in the number of M&A deals, however there were some big dollars and some big names involved. Dell announced that it is selling RSA, its cybersecurity arm to a group of investors for $2.075 billion. Internet of Things company, Forescout went public about two and a half years ago, but was bought by private equity for $1.9 billion this month. Another big deal saw SAIC pay $1.2 billion for Unisys subsidiary, Unisys Federal. Infosys improved its Salesforce capability and US presence, paying $250 million for Simplus, a Salt Lake City based consulting company. Other, smaller deals saw HPE buy cloud security company Scytale and Square bought Toronto based AI startup Dessa (formerly DeepLearni.ng).
Other news was somewhat dominated by the coronavirus outbreak and what that might mean for our industry. Conferences have been cancelled, travel curtailed and one interesting bye-product was an increase in hiring of temp workers in China, to service the many people who cannot leave their homes. Related, but not solely because of coronavirus the Chinese government announced it would be “seizing control” of HNA Group Co, which happens to be the parent company of Ingram Micro. Cisco was also among the first companies to announce impending layoffs due in part of potential coronavirus impacts.
The jobs news around the world was generally upbeat and the US economy continues to perform strongly. In Canada the job numbers were not too bad, but there are lots of clouds on the horizon with blockades affecting infrastructure projects and resulting regional unrest.
That is it for my monthly look at what was happening in the technology space over the last month, compared to the same month in previous years. I’ll be back in about a month’s time, until then … walk fast and smile!