After a recession-induced lull, the tech industry is back playing a familiar game: Let’s Make A Deal.
Just last week, SAP plunked down $5.8 billion on database maker Sybase in the biggest tech deal of the year. A recent flurry of wheeling-and-dealing included IBM, which gobbled up Cast Iron Systems to bolster its standing in Internet-based computing. Apple nabbed Siri, maker of a voice-recognition application, and Intrinsity, a chip designer. Hewlett-Packard snapped up Palm for $1.2 billion. And Salesforce.com acquired Jigsaw, maker of a Web-based business address book, for $142 million.
In this season of mergers and acquisitions, there are bargains aplenty. And many start-ups — especially in hot markets such as mobile and cloud computing — love it.
“Being in the right space definitely makes things exciting,” says Krishna Subramanian, co-founder and chief marketing officer of Mobclix, a 2-year-old start-up that does mobile advertising for apps. It’s been approached by a handful of would-be buyers in the past six months, he says.
Milo.com, a 2-year-old local-shopping search service, has been approached by several potential acquirers the past four months, and by about 40 venture capitalists about possible investments, says Jack Abraham, its founder and CEO. Venture capital “and M&A drive each other,” he says.
Through the first quarter of 2010, the number of tech mergers and acquisitions announced globally swelled to 628, from 405 in the same period a year ago. The average value of deals in which the purchase price was disclosed also mushroomed, to $68 million from $44 million, says Ernst & Young. Acquisitions “really matter to us,” Google Chief Financial Officer Patrick Pichette said in an earnings call in April. Google acquired Picnik, On2 Technologies and Aardvark in the past few months to “build on (Google’s) existing focus areas and to bring new talent and new technology.”
The rise in activity reflects…