11 16 Tech M&A Monthly: Research Report - Megadeals

Corum Research Report

 

Now let’s go to our Corum research report with Amber Stoner, Amanda Tallman, and Thomas Wright.

 

Firstly, congratulations to Amber for her promotion to Director of Research and Amanda for her promotion to Senior Analyst.

 

Amber Stoner

 

Thank you, Bruce.

 

We start with the public markets, where all 3 indices we track returned to July levels as part of a pull-back amid the uncertainties of US elections and other incipient changes, giving the Bull reason to pause before charging forward this week erasing last month’s losses after the election, with the Dow hitting a record yesterday.

 

Our advice remains that tech execs should take advantage of this window of opportunity to at least calibrate the value of their assets, since our Corum Index still shows a relatively strong market in spite of a slow-down on last month’s total volume of transactions after the mid-year boom in spending. There was a significant increase in PE activity as we tracked a swing back toward smaller deals and saw a record number of new clients here at Corum along with increased buyer interest. Megadeals held steady with the largest being the $39B acquisition of NXP by chipmaker Qualcomm which we’ll be addressing in more detail next month.

 

Speaking of megadeals, another chipmaker Broadcom spent $5.5B for Brocade to diversify beyond its core storage networking business. Broadcom plans to divest Brocade’s IP Networking business, which includes the recent $1.5B acquisition of Ruckus, to focus on Broadcom’s ability to address the growing needs of its OEM customers.

 

In the travel booking world, China’s Qunar was taken private by a consortium led by investor Ctrip for $4.4B. We’ll unpack more M&A deals in the travel subsector a little later.

 

Another consortium, made up of UK-based private equity firms, paid $3.2B to get e-commerce company Allegro from Naspers in one of the largest ever takeovers of a Polish tech company.

 

And while not counted among the tech deals, AT&T’s $85B purchase of media conglomerate Time Warner could lead to AT&T using M&A to bolster its recent megadeal with technology allowing it to compete with rivals Comcast and Verizon. Comcast and Verizon have also made billion dollar media content acquisitions in the last few years, followed by smaller tech deals to fill in gaps. It is likely that AT&T will likewise complement its record media purchase with similar advertising and content services tuck-ins going forward. However, the deal must still overcome regulator hurdles, and the president-elect has asserted that his administration will not approve the deal, so we’ll have to keep watching to see how this plays out.

 

In the meantime, let’s go to our market sectors, starting with Consumer, Amanda.

 

 

This is a segment from Tech M&A Monthly: 12 Deal Structure Tips to Maximize Value (November) webcast. For more information, please visit Corum Group's Software M&A Webcast Archive.

 

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