Global technology transactions scorecard, 2Q11
Source: Ernst & Young analysis of FactSet Mergerstat data, accessed 6 July 2011; "Multiple" data accessed via Capital IQ and FactSet Mergerstat, 2 August 2011.
"In this quarter we saw established companies make big-ticket bets on disruptive innovation technology trends that have been developing for the last several quarters."Joe Steger, Global Technology Transaction Advisory Services Leader for the global Ernst & Young organization
The second quarter of 2011 was dominated by big-ticket deals, with cloud computing, smart mobility, sector consolidation, the smart grid, solar energy and internet and mobile video the trends behind 2Q11's ten $1-billion-plus transactions.
Following 1Q 2011, where we saw many deals around internet and mobile video technologies in multiple sectors, 2Q 2011 saw a smaller volume of such deals but one whopper: an $8.6 billion transaction that was the largest of the quarter. Another aspect of smart mobility also appeared in the quarter's top 10 deals: a $1.2 billion transaction in which a provider of communications equipment to public networks is acquiring a company whose software helps fixed-line and mobile network operators better manage the increasing bandwidth demands placed on them by smart mobile devices.
Cloud computing and SaaS
Cloud computing and software as a service (SaaS) deals were pervasive across the computing spectrum in the second quarter. For the second consecutive quarter, the top 10 deals of 2Q 2011 included a telecommunications network operator acquiring a data center operator specializing in cloud services; this quarter's deal was valued at $2.3 billion. Dozens of cloud/SaaS deals were seen in multiple sectors.
Two of the top 10 deals of 2Q 2011 represented slightly more than $10.9 billion in semiconductor sector consolidation. These include a $6.1 billion deal bringing together two analog chip makers and a $4.8 billion deal between two makers of semiconductor manufacturing equipment. The latter deal involves chip-making equipment as well as gear for making high-efficiency solar energy panels.
The use of smart grid technology drove two top ten deals. The largest was a $2.3 billion deal that is part of a vision in which the cloud becomes a forum for integrating information from multiple "social infrastructure" systems that today operate separate, independent information systems. The second was a $1.4 billion deal focused on the integration of smart metering technology for more efficient management of power networks.
Other significant transaction drivers
Other significant deal drivers in 2Q 2011 included: security, social networking, business analytics and health care IT. Of note — the integration of social media and business analytics functions were a key aspect of internet and software sector deals involving advertising and marketing technology platforms. Online gaming also continued to be a major focus of internet sector transactions.
Most of the approximately four-dozen health care IT transactions in 2Q 2011 focused on monitoring, management, record keeping and analytics — part of a larger trend we expect to grow as companies look to make sense of the ever-increasing mass of data that is generated by business systems, mobile applications, social networking platforms and smart metering systems.
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