The year 2021 turned out to be a banner year for enterprise deals, which were of more diverse nature.
While the global pandemic brought many enterprise technology deals to a screeching halt in the first half of 2020 and then picked up pace mostly in the last three months, thanks to some of the billion-dollar tech M&A deals happened between September and December, the year 2021 turned out to be a banner year for enterprise deals, which were of more diverse in nature.
In fact, the first half of 2021 has already broken global records for M&A deals that are worth more than $671 billion. According to data from financial intelligence firm Refinitiv, businesses worldwide had closed over $2.8 trillion in mergers and acquisitions in the first half and the second half too looks eventful and indeed it was!
Just as 2021 was drawing to a close, software giant Oracle reached an agreement to buy Cerner, a health care IT services company for $28.3 billion in an all-cash deal. The companies expect to complete the acquisition in 2022. The acquisition is the largest in Oracle’s history, far surpassing the company’s $10.5 billion acquisition of PeopleSoft in 2005, the $8.5 billion acquisition of BEA Systems in 2008, the $7.4 billion acquisition of Sun Microsystems in 2010 and the $9.3 billion acquisition of NetSuite in 2016.
Private equity firm Clayton snapped up Cloudera for $5.3 billion. The all-cash deal was completed in October. Cloudera went public in 2017 and was largely controlled by activist investor Carl Icahn.
In October, private equity firm Symphony Technology Group completed its $1.2 acquisition of security company FireEye and is now combining the FireEye products organization with the McAfee Enterprise security business STG bought in July for $4 billion. The new organization creates a new cybersecurity industry behemoth with more than 5,000 employees, 40,000 customers and nearly $2 billion in annual revenue.
Consumer security software developer McAfee, meanwhile, disclosed a deal in November to be purchased for $14 billion by a group of private equity and investment firms, including Advent International Corp. and Permira Advisers LLC. The acquisition is expected to be completed sometime in the second half of 2022 and will make McAfee – which went public in 2020 – a privately held company once again.
Meanwhile, email security powerhouse Proofpoint struck a deal to be acquired by private equity firm Thoma Bravo for $12.3 billion. Proofpoint said the acquisition, completed August 31, will provide it with the flexibility and resources to continue investing in the development of its technology.
In December email security provider Mimecast agreed to be acquired by private equity powerhouse Permira for $5.8 billion. That acquisition is slated to be wrapped up in the first half of 2022.
Salesforce wrapped up its $27.7 billion acquisition of collaboration firm Slack in July 2021, intensifying its competition with rival Microsoft and its Teams software. Salesforce originally confirmed the Slack acquisition deal in December 2020, in which the latter became an operating unit of Salesforce led by current Slack CEO Stewart Butterfield and his management team.
Microsoft acquired Nuance for $19.7 billion, making it one of the mega acquisitions in tech history. Microsoft revealed in early April that it would be purchasing AI and speech recognition platform Nuance that works primarily in the healthcare sector.
ServiceNow purchased the Indian robotic process automation company Intellibot in March. It says it hopes to build Intellibot into its own Now Platform, enabling the automation of more business functions.
UK-based software company Aveva acquired its US rival OSIsoft for $5 billion in March. Their combined strength will form one of the largest open standard-based industrial platforms in a market still dominated by proprietary systems.
Hitachi purchased GlobalLogic, a tech outsourcing company for $9.6 billion in March. The deal includes repayment of debt. Hitachi also benefits from GlobalLogic’s vast customer base such as Reuters and McDonald’s.
Dropbox purchases DocSend for $165 million. Dropbox acquired the secure document sharing business in early March to further tap the market for cloud file storage.
VMware announced that it would acquire Mesh7, a secure micro-API gateway for contemporary applications, for an undisclosed sum.
Xero purchased Planday for €183.5 million. Xero, a small business accounting software firm, purchased Planday in a mixed stock and cash deal. Planday boasts an SaaS workforce management and rota scheduling business that works primarily with hospitality companies.
Square purchases Tidal for $297 million. Square will take a majority ownership stake in Tidal, a music streaming platform. Purchased by Jay-Z in 2015, it promises quality streams and better compensation for artists.
Okta announced in March that it would acquire Auth0, an identity management competitor, for $6.5 billion. Auth0 was previously valued at just $1.92 billion in July while seeking $120 million in funding.
Atlassian purchases Chartio, a data visualization tool, for an undisclosed sum.
Autodesk buys Innovyze for $1 billion. Autodesk will acquire software manufacturer Innovyze, which specializes in programs to simulate, model, and analyze water infrastructure. A popular 3D modeling service, Autodesk is hoping to gain inroads in the water industry.
Cisco purchases Acacia for $4.5 billion. The deal was originally announced last July, in which Cisco ended up paying an additional $1.9 billion to close the deal. Acacia sells high-speed optical systems.
The M&A activity quickly rebounded into 2021 as the economy began to recover and the momentum will continue, according to Gartner analysts. By 2022, the level of global tech M&A providers will surpass previous highs recorded in 2018.
“Market conditions for deal making will continue to improve as volatility stemming from COVID-19 subsides,” said Max Azaham, senior research director at Gartner. “Tech CEOs pursuing acquisitions should anticipate increased competition for targets and take steps to gain advantages over other acquirers to earn seller acceptance,” mentioned Azaham.