|By Kevin Dee,
Chairman of the Board at Eagle
A Little History of previous year’s Octobers
Five years ago in October 2012, news was dominated by Hurricane Sandy and the US presidential election. The big deal of the month was a $1.5 billion merger of two US cell carriers, T-Mobile and MetroPCS. There were also a number of smaller deals, with EMC beefing up in the security area (Silver Tail), Telus expanding its medical solutions portfolio (Kinlogix Medical) and Avnet improving its IBM capabilities (BrightStar and BSP). In the social networking world, Yelp bought its European competitor Qype in a $50 million deal. In October 2013, Oracle announced two acquisitions, both cloud based companies: Big Machines and Compendium. Other “names” out shopping included Avaya buying the software division of ITNavigator for its call centre and social media monitoring software; Rackspace bought ZeroVM, a tech company with a software solution for the cloud; Intuit bought consulting company Level Up Analytics, primarily to acquire its talent; VMWare bought “desktop as a service” company Desktone; Netsuite bought human capital software company TribeHR; and Telus enhanced its mobile offering with the purchase of Public Mobile. Three years ago, in October 2014 we saw a new trend with two public companies both choosing to split into smaller entities. HP announced it was creating a business service focused Hewlett-Packard Enterprise and personal computing & printer company HP Inc. Symantec also chose to split into two independent public companies, one focused on business and consumer security products, the other on its information management portfolio. Other interesting news saw IBM pay $1.5 billion to GlobalFoundries so it would take away its money-losing semiconductor manufacturing business. NEST bought competitor Revolv; EMC bought three cloud companies — The Cloudscaling Group, Maginatics and Spanning Cloud Apps — and in Korea, Kakao and Daum merged to form a $2.9 billion internet entity. October 2015 brought some big deals with the biggest seeing Dell offer $26 billion to buy storage company EMC. Interestingly an EMC subsidiary, VMWare was also out shopping, picking up a small email startup, Boxer. In another deal involving “big bucks”, Western Digital paid $19 billion for storage competitor Sandisk. IBM were also writing a big cheque, paying $2 billion in a big data/internet of things play for The Weather Network (minus the TV operations), and IBM also picked up a storage company, Cleversafe. Cisco paid $522.5 million for cybersecurity firm Lancope; LogMeIn paid $110 million for LastPass; Trend Micro paid $350 million for next generation intrusion prevention systems company HP Tippingpoint; Red Hat picked up deployment task execution and automation company Ansible; Vasco Data Security paid $85 million for solution provider Silanis; and Apple bought a speech processing startup, VocalIQ. As industries converged, it was interesting to see Securitas pay $350 million for Diebold’s US Electronic Security business. October 2016 saw Qualcomm pay $47 billion for NXP Semiconductor. The only other sizable deal saw Wipro pay $500 million for IT cloud consulting company Appirio. Google picked up Toronto-based video marketing startup FameBit and Pivot Technology Solutions picked up Ottawa-based Teramach.
Which brings us back to the present
October 2017 continues a recent trend of reduced big ticket M&A activity, although there was certainly some action. Not yet a done deal, but Broadcom is chasing Qualcomm pretty hard and if it goes through it will be the biggest tech deal yet. The latest rejected offer was north of $100 billion (some reports said $130 billion), but watch that space. In the meantime, Cisco is shelling out $1.9 billion for Broadsoft which improves Cisco’s software capabilities. The final significant deal saw Telus beef up its service provider capability with a $250 million purchase of Xavient.
The other company in the news was Amazon (a) because of its much publicized search for a site for its second headquarters which has 239 cities around the world excited at their prospects; (b) because they also announced a second presence in Vancouver, bringing another 1,000 jobs and (c) for its growing influence in the AI world, announcing a research center in Germany.
The economy continues to have many positive signs, although Hurricane’s Harvey, Irma and to a lesser extent Maria caused some temporary negative impact to employment numbers in the US. The general consensus seems to be that things will pick up again now, with some sectors even benefiting from the clean-up work. Canada’s numbers were again good with Canada adding more than 300,000 jobs in the last year.