|By Kevin Dee, Co-Founder of Eagle|
This is my 30,000 foot look at events in the Tech industry for August 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 August in previous years …
Five years ago in August 2015 there were two “billion-dollar” deals. Symantec sold Veritas (which it paid $13.5 billion dollars for 10 years prior) to a group of investors for $8 Billion and IBM shelled out $1 billion for Merge Healthcare. Smaller deals saw Calgary-based Above Security bought by Hitachi; Transcomos bought 30% of Vietnamese daily deals site Hotdeal; Freshdesk bought live-chat company 1Click; and PLDT bought ecommerce startup Paywhere.
August 2016 saw a fair bit of M&A activity although there were no billion-dollar deals. The largest deal saw global staffing company Randstad buy Monster for $429 million. A similar sized deal saw Intel shell out $408 million for artificial intelligence company Nervana. Hewlett Packard Enterprises paid $275 million for SGI (what was left of Silicon Graphics); Apple paid $200 million for artificial intelligence company, (there is a pattern here), Turi; Salesforce bought business analytics company Beyondcore for $100 million; and ScanSource paid $83.6 million for telecom cloud services company Intelisys Communications. Other acquisitions saw Microsoft snap up two companies, artificial intelligence scheduling software company Genee, and their XBox division bought interactive livestreaming company Beam.
Three years ago, August 2017 was relatively slow on the M&A front. Symantec sold its website security business to DigiCert for $1 billion, plus a stake in the larger entity. Cisco paid $320 million for hyperconvergence company Springpath, CGI bought a Pittsburgh consulting company, Summa Technologies and Accenture bought a Toronto consulting company VERAX. While not a pure tech play, the biotech world saw Aclaris pay $100 million for Confluence.
August 2018 saw a fair amount of M&A activity, a lot of smaller deals, a few significant moves and some recognizable names out buying companies. The big deal of the month saw Cisco pay $2.35 billion for access security company Duo Security. In other deals VMWare paid $500 million for cloud management company CloudHealth; and HP splashed out $500 million for Europe’s largest print provider, Apogee. Apple snapped up Augmented reality startup Akonia; Accenture made two small acquisitions in the digital space, Mindtribe and Pillar Technology; Intel picked up a small AI company Vertex.Ai and Vonage paid $35 million for video company TokBox. Apple was also in the news because it became the first public company to reach a $1 trillion valuation, and they were quickly followed by Amazon.
Last year, August 2019 was a busy month in M&A, with the big deal getting mixed reviews as Broadcom paid $10.7 billion for Symantec’s security unit. Some saw this as old tech buying old tech, but for Broadcom it provides diversity of offering. VMWare had a busy month paying $4.8 billion to acquire Carbon Black and Pivotal, and then announcing the acquisition of Intrinsic. Private equity company BC Partners paid $2.1 billion to take Presidio private, and Salesforce paid $1.35 billion for ClickSoftware to improve its service capability. The final deal in the BIG dollar leagues saw Splunk pay $1.05 billion for cloud monitoring platform SignalFx. Accenture bought two companies; Northstream, a telecom consulting company plus engineering company, Fairways Technologies. DXC spin-off Perspecta paid $250 million for managed services company Knight Point and there were a number of other “big name” companies making acquisitions; Amazon bought E8 Storage; Cisco bought Voicea; Microsoft bought JClarity; Twitter bought Lightwell and HPE bought the assets of MapR.
Which brings us back to the present …
August 2020 was a quiet month on the M&A front with no blockbuster deals, but still a few worthy of mention. Accenture has been on a bit of a tear in 2020, and made their 20th acquisition this year, content production company CreativeDrive. Apple made an interesting small acquisition, Spaces, who have been bringing virtual reality to videoconferencing… Zoom meetings may never be the same! Datacentre company Equinix increased its footprint, this time into India, paying $161 million for the Indian operations of GPX Global Systems. Service management company Kaseya bought Graphus, a startup that helps protect against email-based threats. NTT Data Services has also been a heavy buyer, and added ServiceNow consultancy Acorio to its offerings.
A number of companies announced layoffs this month. These include Dell, VMware, Oracle, Accenture, NetApp and Salesforce. In contrast, there are some winners in and amongst our new reality and one of them, Amazon, announced that it was adding 3,500 new tech and corporate jobs!
Economies around the world continue to suffer and accumulate debt to help their populations cope. As just one example, the UK had a 20.4% decline in GDP in the second quarter and has the worst recession of any G7 country. Canada’s GDP decline was 12% which puts it middle of the pack. With a return to school happening, most countries are bracing for what that might mean, a second wave, another lockdown… or reprieve? Time will tell.
That is what caught my eye over the last month. The full edition will be available soon on the Eagle website. Hope this was useful and I’ll be back with the September 2020 industry news in just about a month’s time.
Until then, Walk Fast and Smile… wear a mask and wash your hands!