For most businesses across the world, 2020 was a year of difficulties and economic hardship. However, it has proven to be a banner year for tech mergers and acquisitions (M&A). The logic is simple. Since down markets are the perfect time to consolidate, 2020 also saw some of the big tech companies take the opportunity to grow their business with major acquisitions.
Analysts believe, after a quieter year in 2019 that saw tech investment activity plunging, it was a resurgence of M&A deals in the current year. To begin with even though 2020 was all about COVID-19 and market adversities, the tech sector had major deal flow even before the pandemic began.
By the end of February, one-third of the technology M&As of the year had already happened, as per reports. The pandemic, of course, had a devastating effect on activity in the first half of the year. Deal levels dropped due to a lack of confidence in the global economy as well as sudden changes to transaction execution methods. Only a few large deals occurred between March and August.
However, the industry picked up pace and most of the billion-dollar tech M&A deals happened from September‒December and the trend is likely to continue for the first half of 2021.
Here, we highlight 20 of the most important enterprise tech M&A deals that grabbed the headlines in 2020 (given in order of valuation).
- Nvidia snaps up Arm for $40 billion
The biggest tech acquisition of the year (till date), in September, Nvidia said it has acquired Arm for $40 billion. The deal combines Nvidia’s artificial intelligence (AI) computing capacity with the massive ecosystem of Arm to power everything from self-driving vehicles to smart meters.
Both Nvidia and Arm see opportunities for growth in enabling AI software that can run on Arm’s chips from those on tiny smartphones to huge servers.
Nvidia CEO Jensen Huang said in an interview with Forbes that his first priority after the acquisition would be to “bring Nvidia technology through Arm’s vast network”.
- AMD to acquire Xilinx for $35 Billion
AMD announced in October it would acquire Xilinx in a $35 billion all-stock deal, the company that specializes in programmable processors aimed at high-performance use cases like video file compression and digital encryption. This will help AMD compete with Intel in data centers.
“Our acquisition of Xilinx marks the next leg in our journey to establish AMD as the industry’s high performance computing leader and partner of choice for the largest and most important technology companies in the world,” AMD President and CEO Lisa Su said in a statement.
Both US firms also outsource the manufacturing of their chips, primarily to Taiwan, and use modular design principles, so there are immediate synergies to be seen in the deal.
- Salesforce acquires Slack for $27.7 Billion
In one of the biggest software acquisition of the year (so far), Salesforce snapped up the popular workplace communication company Slack for $27.7 billion in stock and cash. The deal combines the power of two SaaS giants, which CEO Marc Benioff declared as ‘a match made in heaven’.
He said, “Together, Salesforce and Slack will shape the future of enterprise software and transform the way everyone works in the all-digital, work-from-anywhere world.”
- Koch Industries buys Infor for $13 billion
Koch Industries took full control of Infor ERP vendor Infor. The latter was 70% owned by Koch Industries which is a privately held conglomerate with interests in manufacturing, chemicals, minerals and commodities. In the second month of 2020 they agreed to buy out the remaining stake in the target company from the founding investors at Golden Gate Capital.
Due to the previous partnership, the companies have received a boost in the development of cloud suites. It is known that Infor was ramping up for what was expected to be a significant initial public offering, but now all the rumors regarding an IPO were quashed.
- Intuit acquires Credit Karma for $7.1 billion
US software company Intuit has acquired its rival Credit Karma for a sum of $7.1 billion. This acquisition enables Intuit to build a complete financial assistant that would assist the customers, combining income, credit histories and spending an all in one financial product.
Intuit’s and Credit Karma now has shared goal of delivering a personal financial assistant to help consumers improve their lives by finding financial products to increase savings, pay down debt and access their money faster. CEO of Intuit, Sasan Goodarzi, said in a statement, “By joining forces, we can provide them with insight, enabling them to have a higher education, vacation, also to buy a home that they wanted.
- Visa acquires Plaid Technologies for $5.3 billion
In January, Visa has agreed to purchase FinTech firm Plaid for $5.3 billion early this year. Plaid, which was launched in 2013, is attractive to Visa because it has the technology to get access to a customer’s bank account data, collect it and aggregate it for financial services providers to use. Plaid uses a unified application programming interface (API) to link FinTech apps with people’s bank accounts.
“We believe Visa’s acquisition of Plaid is an important development in giving consumers more security and control over how their financial data is used,” said Gordon Smith, co-president, JPMorgan Chase and CEO of Consumer and Community Banking.
- Insight Partners buys Veeam for $5 billion
In January 2020, private equity firm Insight Partners announced that it plans to acquire cloud backup company Veeam Software in an all-cash deal valued at around $5 billion.
Veeam founded by Russians Andrei Baronov and Ratmir Timashev was earlier headquartered in Switzerland. Veeam now becomes a US-based company with its corporate headquarters in Columbia, Ohio in USA. William H. Largent has been promoted to the CEO role.
With a greater focus on the US market, the company has plans to invest more in Veeam’s hybrid cloud strategy and eyes international expansion.
- Twilio buys Segment for $3.2 Billion
In October Cloud communications specialist Twilio said it would acquire customer data platform Segment for $3.2 billion in an all-stock deal.
The acquisition was completed in November, in which Segment becomes a division of Twilio and will continue to be led by Segment CEO and co-founder Peter Reinhardt, reporting to Twilio co-founder and CEO Jeff Lawson.
Twilio hopes that by bringing Segment’s rich customer data together with its variety of engagement channels it can enable personalized customer outreach at scale.
- Symphony Tech Group buys RSA Security for over $2 billion
In February 2020, Dell Technologies confirmed it’s selling its RSA cybersecurity business to a consortium led by Symphony Technology Group (STG), Ontario Teachers’ Pension Plan Board and AlpInvest Partners, for more than $2 billion in cash. Speculation for the deal was intensified in the month of January as Dell was looking to offload RSA. On September 7, 2016, RSA was acquired by and became a subsidiary of Dell EMC Infrastructure Solutions Group through the acquisition of EMC Corporation by Dell Technologies.
- Adobe buys Workfront for $1.5 billion
In November, Adobe announced it is acquisition of marketing workflow management startup Workfront for $1.5 billion. The deal is expected to close sometime from December to February 2021. The acquisition gives Adobe more online marketing tooling to fit into its Experience Cloud.
This one helps companies manage complex projects inside the marketing department and in turn enhance customer experience.
- Salesforce buys Vlocity for $1.3 billion
Salesforce made its first acquisition of 2020 in February, picking up San Francisco-based SaaS company, Vlocity for $1.33 billion. The Vlocity acquisition will enable Salesforce to branch out further into vertical industries and have a strategic payoff, believe analysts.
Calling it “a great deal”, Ray Wang, founder and principal analyst at Constellation Research said ““Vlocity on its own doesn’t have as big a future without Salesforce. They have to be together. So Salesforce doesn’t need to buy them. They could keep building out, but it’s better for them to buy them now.”
- F5 Networks buys Shape Security for around $1 billion
F5 Networks’ $1 billion acquisition of Shape Security, completed in January 2020, is expected to strenthen the protection of its application delivery network business. Shape offers fraud protection for web and mobile applications by analyzing the flow of data into them, and F5 already plays a role in handling that data in many enterprises.
- Intel buys Moovit for $1 billion
Intel confirmed that it is acquiring Israeli mobility data specialist Moovit for $1 billion in May. The chipmaker will look to bring Moovit into its Mobileye mobility unit, which the chipmaker also acquired, for $15.3 billion in 2017. Mobileye provides real-time traffic data to third parties like ride-hailing services and transit authorities through its popular mobile app. Intel was a strategic investor in the startup prior to this acquisition.
“Mobileye’s ACAS [advanced driver-assistance systems] technology is already improving the safety of millions of cars on the road, and Moovit accelerates their ability to truly revolutionize transportation – reducing congestion and saving lives – as a full-stack mobility provider,” Intel CEO, Bob Swan, said in a statement.
- Facebook acquires Kustomer for $1 billion
Facebook announced in November that it is acquiring New York-based startup Kustomer for $1 billion.
Kustomer has built an omnichannel CRM platform, specifically focused on the contact center and Facebook is keen to connect customers of its Messenger, WhatsApp and Instagram services with businesses so that they can talk to their customers across a broad variety of digital channels.
Dan Levy, Vice President of Ads and Business Products, and Matt Idema, COO, WhatsApp, wrote in a joint statement. “With this acquisition, more people will benefit from customer service that is faster, richer and available whenever and however they need it.”
- Amazon buys autonomous driving startup Zoox
Amazon announced that it is acquiring the self-driving vehicle company Zoox for a reported $1.2 billion in June. Zoox was planning on launching a pilot program for its ride-sharing service this year, and raised nearly $1 billion in funding to date, making it one of very few autonomous driving ‘unicorns’.
Zoox CEO, Aicha Evans and his cofounder Jesse Levinson will continue to lead Zoox as “a standalone business” within Amazon.
Jeff Wilke, Amazon’s CEO for worldwide consumer, in a blog post. “Like Amazon, Zoox is passionate about innovation and about its customers, and we’re excited to help the talented Zoox team to bring their vision to reality in the years ahead.”
- HPE acquires Silver Peak
HPE acquires Silver Peak for $925 million, a company that specializes in WAN technology. HPE aims at bolstering its vision of “edge-to-cloud transformation” with this acquisition. The deal totaled $925 million and brought Silver Peak into the Aruba business unit.
HPE president and CEO Antonio Neri called WAN transformation ‘a crucial element of his company’s Intelligent Edge and edge-to-cloud strategy,’ and believes Silver Peak’s SD-WAN capabilities would pair well with Aruba’s wired and wireless capabilities.
- SUSE buys Rancher Labs
In December, SUSE, an open source specialist, acquires open source Kubernetes startup Rancher Labs for an undisclosed amount. Cupertino-based Rancher has built a popular open source Kubernetes container management platform, with customers like Sky, Sony Playstation and Deutsche Bahn.
“The deal essentially makes Rancher Labs into SUSE’s containerization “innovation center,” said IDC research director Gary Chen. This will allow enterprise workloads function across different platforms of edge, cloud and local computing.
- Accenture buys Revolutionary Security
In April, Accenture made its third cybersecurity deal of the year with the acquisition of Revolutionary Security, a startup that focuses on cybersecurity consultancy services.
Kelly Bissell, who leads Accenture Security globally, said in a statement, “Revolutionary Security’s service offerings are a perfect complement to Accenture’s portfolio, and the acquisition furthers our mission of helping clients better protect and defend their organisations across their entire ecosystem.”
Earlier, Accenture picked up Symantec’s security services division in January and UK-based Context Information Security in March.
- Microsoft to acquire Affirmed Networks
Microsoft announced that it is acquiring the Boston-based Affirmed Networks for an undisclosed amount in March. The 2010-founded company specializes in virtualization and cloud-based mobile network technology, which makes it an attractive acquisition target for any company investing in next-generation 5G connectivity.
“This acquisition will allow us to evolve our work with the telecommunications industry, building on our secure and trusted cloud platform for operators. With Affirmed Networks, we will be able to offer new and innovative solutions tailored to the unique needs of operators, including managing their network workloads in the cloud,” Yousef Khalidi, corporate vice president of Azure Networking wrote in a blog post.
- BMC Software to acquire Compuware
In March, enterprise software major BMC agreed to buy Compuware in March for an undisclosed amount, marking its third purchase of a mainframe specialist in just over a year, including RSM Partners and CorreLog. “The combined company will help customers better manage their mainframe operations, cybersecurity, application development, data, and storage as part of their enterprise DevOps strategies,” BMC said in a statement.
