M&A wrap: Google, Microsoft, IBM, Cisco, Apple, TheStreet, Jim Cramer

techgiantdeals

Alphabet Inc.'s Google (Nasdaq: GOOGL) has made more acquisitions than any other tech giant over the last decade, according to RS Components. Google has a made a total of 182 acquisitions, which is more than double than Microsoft Corp. (Nasdaq: MSFT) and Apple Inc. (Nasdaq: AAPL), and over triple the number of businesses acquired by Amazon.com Inc. (Nasdaq: AMZN). In 2018, Microsoft acquired the most companies at 16. Apple bought an average of eight companies every year between 2009 and 2018. "Competition in tech is high with big players splashing out huge sums to future proof their business, boosting their portfolio and increasing market share," the RS Components report says. 2018 saw Microsoft buying GitHub for $7.5 billion, and IBM (NYSE: IBM) spending $34 billion on Red Hat. "As consumer appetite for innovative products grows, so does the competition. Acquiring pioneering startups or established businesses is a great way for companies to stay ahead." Earlier in 2019, Google said it will buy Looker Data Sciences Inc. for $2.6 billion, expanding its offerings to help customers manage data in the cloud.

Tech dominates dealmaking. The technology, media and telecom, or TMT, sector accounted for about 40 percent of total private equity deal volume and one-third of total capital invested by PE firms over the last five years, according to EY Private Equity. Looking forward, the next five years of M&A activity will be fueled by a whole new set of developments. As one wave of technological innovation crests, another is forming. “With themes such as cloud computing and mobility now mainstream, PE firms are focusing on the next wave of disruption — technologies such as artificial intelligence and machine learning, robotic process automation (RPA), Internet of Things (IoT), robotics, drones, blockchain, augmented reality and virtual reality,” finds the April edition of EY’s quarterly PE Pulse report. Read our full coverage: Smart cities, IoT, AI, robots, edge computing will fuel next wave of tech M&A.

DEAL NEWS
Dassault Systemes SE, a maker of industrial design software, agreed to buy Medidata Solutions Inc. (Nasdaq: MDSO) for $5.7 billion to gain a foothold in the fast-growing market for clinical trial technology. The deal pushes the French company further beyond its design roots into data processing and business analysis. Medidata’s software analyzes pharmaceutical and biotech trials for some of the world’s biggest drugmakers including Sanofi SA (Nasdaq: SNY), Pfizer Inc. (NYSE: PFE) and AstraZeneca plc (NYSE: AZN). Read the full story by Bloomberg News: Dassault buys Medidata in health data push.

Digital publisher TheMaven is acquiring financial news site TheStreet Inc. (Nasdaq: TST) for $16.5 million. The transaction represents the culmination of TheStreet's restructuring process, which involved divesting RateWatch, BoardEx and The Deal. TheStreet acquired The Deal in 2012 from Wasserstein & Co. for $5.8 million. Jim Cramer co-founded TheStreet in 1996, and went public in 1999. Advisors to TheStreet include: Moelis & Co. (NYSE: MC), Lake Street Capital Markets and Orrick, Herrington & Sutcliffe LLP.

Leeds Equity Partners-backed Exterro has acquired Jordan Lawrence Group, a provider of data privacy and data management software. Advisors to Exterro include: Morris Manning & Martin LLP and Reed Smith LLP. The advisor to Jordan Lawrence is Marks Baughan Securities.

CutisPharma has acquired SilverGate Pharmaceuticals. The combined company is called Azurity Pharmaceuticals, and is backed by NovaQuest Capital Management.

PEOPLE MOVES
Craig Krinbring has joined investment bank B. Riley FBR as a managing director. He was most recently with Kema Partners, and focuses on the technology sector.

Kathleen Taylor has been named chair at private equity firm Altas Partners. She currently serves as chair at the Royal Bank of Canada, and was previously CEO of Four Seasons Hotels and Resorts.

FEATURED CONTENT
Healthcare companies are spending more on information technology than ever before. Private equity firms including: Bain Capital, GTCR, Great Hill Partners, The Riverside Co. and New Heritage Capital, are investing in the innovations most in demand, including big data, SaaS and artificial intelligence, as we explore in depth in Mergers & Acquisitions' feature, Healthcare's must-have technologies. “Healthcare IT is the largest cottage industry in the world,” says Sam Hendler, who leads healthcare IT deals at Harris Williams.“Healthcare IT is a highly fragmented, multi-billion-dollar market with thousands of companies focused on different $250 million to $500 million sub-markets. Savvy investors see there is an opportunity to aggregate assets and build platforms of scale. It’s an incredibly exciting time in healthcare IT.” For recent transactions that showcase the trends, see 5 private equity-backed healthcare IT deals.

Activity and urgency characterize the current dealmaking environment, say investment bankers and other M&A advisors interviewed by Mergers & Acquisitions. After a record-breaking 2018, forecasts for 2019 remain bullish. Advisors point to a lot of cash that must be deployed by strategic buyers and private equity firms alike; a healthy U.S. economy; and low interest rates. Competition for high-quality targets has never been more intense, especially for technology providers, they report, which means sellers are commanding high prices. It all adds up to a seller’s market. A mood of urgency prevails, as dealmakers seek to close deals quickly, while conditions remain favorable. The advisors interviewed for this story say they don’t see signs of a recession this year; however they are closely monitoring bellwethers, including corporate earnings, wage pressure, global supply chains and slowdowns abroad. They are recommending that clients be prepared for an economic slowdown in the next two years. Specialization is the name of the game, and investment bankers advise clients to seek targets with business-model stability, limited cyclical exposure and a recurring revenue business model. Technology, business services, healthcare, consumer and manufacturing are among the most promising sectors. Read the story: 8 M&A advisors urge closing deals now, while economy stays strong.

May featured deals closed by ACI Worldwide Inc. (Nasdaq; ACIW)., Genstar, Morgan Stanley (NYSE: MS) and Tesla Inc. (Nasdaq: TSLA). Read the full story: Deals that closed in May: ACI Worldwide, Genstar, Morgan Stanley, Tesla.

Today's active M&A market demands a robust set of tools and services. Enter service providers. From online marketplaces, such as Axial, led by CEO Peter Lehrman (pictured), to offerings that help private equity firms administer funds, such as Frazier & Deeter's FD Fund Administration, the service providers featured in Mergers & Acquisitions' updated annual dealmaker's guide help get transactions done. For the full guide, read: Dealmaker's guide to service providers: Accordion, Axial, BluWave, Frazier & Deeter.

Big data, Artificial Intelligence (AI), the Internet of Things (IoT) and 5G are transforming the business world. By embracing these technologies, organizations across the globe are realizing untapped potential in efficiency, customer experience, talent and profitability, and have been able to make better, more streamlined mergers and acquisitions, writes Bank of America Merrill Lynch's Robert Arth in a guest article. Read the full story: Why the middle market needs big data.

Excelled. Innovated. Inspired. That’s what the eight winners of Mergers & Acquisitions’ 12th Annual M&A Mid-Market Awards did in 2018. Our awards honor the leading dealmakers and deals that set the standard for transactions in the middle market. In addition to Nike, award winners include: Fortive, TA Associates, the Riverside Co., Harris Williams, Monroe Capital, Goodwin and Luminate Capital Partners' Hollie Haynes. Read our full coverage: Meet the winners of the M&A Mid-Market Awards: Nike, Fortive, TA, Harris Williams.

Mergers & Acquisitions has named 36 leaders the 2019 Most Influential Women in Mid-Market M&A, including Kainos Capital's Sarah Bradley, Kayne Anderson Capital Advisors' Nishita Cummings and Pelham S2K Managers' Venita Fields. All 36 are outstanding dealmakers both inside and outside of their firms. This year, we asked the featured dealmakers to tell their own stories through Q&As, including their advice for women. Related: Meet the 2019 Most Influential Women in Mid-Market M&A.

EVENTS
ACG Boston brings together 700-plus dealmakers for DealFest Northeast and DealSource Select 2019 at the Cyclorama and the State Room, June 12-13.

Exponent Women hosts the Annual Exchange, which brings a trusted network of women dealmakers together for a focused day of robust content and networking, at Second in New York, on July 11. The Exchange provides attendees with opportunities to establish new connections, reinforce existing ones and absorb timely and relevant knowledge from industry leaders.

ACG Seattle hosts the Northwest Middle Market Growth Conference at the Fairmont Olympic Hotel in Seattle on July 25.

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