|By PR Newswire||
|November 12, 2012 11:22 AM EST||
NEW YORK, Nov. 12, 2012 /PRNewswire/ -- The aggregate value of technology mergers & acquisitions (M&A) fell 52% year-on-year (YOY) and 15% compared with the previous quarter to US$28.2b in the third quarter of 2012, according to Ernst & Young's Global technology M&A update: July-September 2012 report.
Large M&A transactions gave way to smaller, more strategic deals, as companies proceeded cautiously in light of continued, widespread macroeconomic uncertainty. In particular, the total volume of announced deals in 3Q12 was 752, up 2% YOY and 3% sequentially (on 2Q12). Strategic transactions continue to be driven by five long-term megatrends that are generating disruptive innovation in technology and leading to technology-enabled innovation in other industries. These megatrends are smart mobility, cloud computing, social networking, big data analytics and a growing sense of blur and convergence as technology sectors come together and the technology industry enters other industries as enabling innovation.
Notably, corporate and private equity (PE) deal volume moved in opposite directions: corporate was up 4% both YOY and sequentially to 701 deals in 3Q12, while PE declined 22% YOY and 2% sequentially to 51 deals in 3Q12.
The study also found that the volume and value of cloud/software as a service (SaaS) deals remained significantly higher than any other deal driver in the third quarter. Mobile/e-payment technologies surged in value during 3Q12, and deal value surged again for health care information technology (HIT) after falling in 2Q12. Social networking deals fell in value, but held steady in volume.
Joe Steger, Global Technology Industry, Transaction Advisory Services Leader at Ernst & Young, says:
"Once again, the macroeconomic environment is challenging technology M&A. But unlike after the global downturn that began in late 2007, when deal values and volume both fell hard and fast, volume continues to grow — at least a little."
"This is a real testament to the spreading strength of the 'social-mobile-cloud' and big data analytics megatrends. These are major forces and they are still driving technology company transactions. So, we'll continue to see many smaller strategic technology deals, and caution around executing large transformative deals until macroeconomic conditions and confidence improve. But the long-term outlook for global technology M&A remains strong."
Large infrastructure deals give way to more nuanced strategic plays
Sub-trends are gaining traction as data center performance, mobile/e-payments and HIT, along with the five megatrends, continued to drive strategic deals in 3Q12. For example, deals related to the rapid evolution of data center technology — necessary to meet the demands of cloud computing, smart mobility and big data analytics — surged ahead, in spite of broader macroeconomic challenges. And while the value of social networking and patent deals declined from 2Q12, buyers continued to target technologies that add social functions to enterprise software and intellectual property (IP) associated with the five megatrends. There was a variety of interesting deals blurring across the communications equipment (CE), computers, peripherals and electronics (CPE), semiconductor, and software sectors that all share one thing in common: technology for boosting performance in data centers.
Cross-border deal value declines, repeating 2011 pattern
Cross-border (CB) deal value fell 40% sequentially in 3Q12 to US$10.5b, after surging 58% sequentially to US$17.4b in 2Q12. CB volume was also down, though only by one deal YOY and 2% sequentially. This mirrors a pattern in 2011, when macroeconomic uncertainty appeared to dampen CB deals more than in-border (IB) in the second half of the year despite a CB volume and value spike in the first half.
Regional snapshot: US acquired value grows; Brazil enters 'Top 10'
Americas' deal-makers captured a sequentially smaller share of global deal volume for the second consecutive quarter but a significantly larger share of global value. Key 3Q12 deal drivers included cloud/SaaS, smart mobility, social networking and big data, as well as health care and payments technologies — and nearly US$1b in disclosed-value distributor deals. In aggregate, the US captured 9 of the top 10 global technology deals (based on disclosed value) of the quarter – the tenth went to Brazil.
Looking ahead: M&A valuations expected to decline, but turnaround is possible
Data from Ernst & Young's biannual Capital Confidence Barometer – Technology Industry, a recent survey of 1,500 global executives (including 154 technology executives) on M&A sentiment, indicates that technology executives' confidence in the global economy is weakening.
Technology respondents say there is a widening gap between buyers and sellers in terms of M&A valuations. Forty-five percent of technology company respondents to the October 2012 survey expect M&A valuations to decline over the next 12 months compared with 21% in the April 2012 survey. In April, 40% said valuations would increase but only 28% believed so in October. And overall, in terms of economic confidence, the technology view is more pessimistic than that of all-industry respondents.
This said, there are a number of factors that could spark a turnaround in the technology M&A landscape. For example, cloud/SaaS deals were strong in 3Q12 and could fuel additional M&A; PE firms still have "dry powder" — unused funds that they have to invest soon or potentially give back to their investors; and smart mobile device makers now range from disruptive leaders to weakening providers in search of turnarounds — and many in between looking for a lever to success.
"While most of the ingredients necessary for a deal recovery remain in place – plentiful cash reserves, adequate credit availability and transformative technologies – one element remains elusive: economic confidence. Without it, the M&A market will continue to be constrained by conservatism. This is especially true for larger deals," concludes Steger.
About the reports
Global technology M&A update: July–September 2012 is based on Ernst & Young's analysis of The 451 Group M&A Knowledgebase data for 2011 and 2012. Deal activity and valuations may fluctuate slightly based on the date that the database is accessed. The full report is available at www.ey.com.
Capital Confidence Barometer – Technology Industry (Outlook October 2012 - April 2013) is based on a regular survey of senior executives from large companies around the world, conducted on a biannual basis by the Economist Intelligence Unit (EIU) on behalf of Ernst & Young. The survey provides a snapshot of corporate confidence in the economic outlook, and it identifies boardroom trends and practices the way companies manage their capital agenda. The full report is available at www.ey.com.
Ernst & Young's Global Technology Center
Ernst & Young's Global Technology Center connects a worldwide team of more than 15,000 technology professionals to help clients navigate the challenges of this continuous change. We provide assurance and tax guidance through a network of experienced advisors to help clients manage risk, transform business performance and sustain improvement.
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 167,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity.
Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit www.ey.com.
This news release has been issued by EYGM Limited, a member of the global Ernst & Young organization that also does not provide any services to clients.
SOURCE Ernst & Young
Pulzze Systems was happy to participate in such a premier event and thankful to be receiving the winning investment and global network support from G-Startup Worldwide. It is an exciting time for Pulzze to showcase the effectiveness of innovative technologies and enable them to make the world smarter and better. The reputable contest is held to identify promising startups around the globe that are assured to change the world through their innovative products and disruptive technologies. There w...
Aug. 24, 2016 04:15 PM EDT Reads: 290
SYS-CON Events announced today Telecom Reseller has been named “Media Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
Aug. 24, 2016 04:15 PM EDT Reads: 391
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...
Aug. 24, 2016 04:15 PM EDT Reads: 2,530
Smart Cities are here to stay, but for their promise to be delivered, the data they produce must not be put in new siloes. In his session at @ThingsExpo, Mathias Herberts, Co-founder and CTO of Cityzen Data, will deep dive into best practices that will ensure a successful smart city journey.
Aug. 24, 2016 02:15 PM EDT Reads: 1,431
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Aug. 24, 2016 12:00 PM EDT Reads: 3,838
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Aug. 24, 2016 11:00 AM EDT Reads: 2,082
In today's uber-connected, consumer-centric, cloud-enabled, insights-driven, multi-device, global world, the focus of solutions has shifted from the product that is sold to the person who is buying the product or service. Enterprises have rebranded their business around the consumers of their products. The buyer is the person and the focus is not on the offering. The person is connected through multiple devices, wearables, at home, on the road, and in multiple locations, sometimes simultaneously...
Aug. 24, 2016 09:45 AM EDT Reads: 2,246
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
Aug. 24, 2016 09:00 AM EDT Reads: 3,504
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Aug. 24, 2016 07:45 AM EDT Reads: 2,081
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
Aug. 24, 2016 07:15 AM EDT Reads: 1,655
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
Aug. 24, 2016 07:00 AM EDT Reads: 1,743
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
Aug. 24, 2016 04:30 AM EDT Reads: 2,179
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Aug. 24, 2016 03:30 AM EDT Reads: 2,934
Akana has announced the availability of version 8 of its API Management solution. The Akana Platform provides an end-to-end API Management solution for designing, implementing, securing, managing, monitoring, and publishing APIs. It is available as a SaaS platform, on-premises, and as a hybrid deployment. Version 8 introduces a lot of new functionality, all aimed at offering customers the richest API Management capabilities in a way that is easier than ever for API and app developers to use.
Aug. 24, 2016 02:00 AM EDT Reads: 1,406
Personalization has long been the holy grail of marketing. Simply stated, communicate the most relevant offer to the right person and you will increase sales. To achieve this, you must understand the individual. Consequently, digital marketers developed many ways to gather and leverage customer information to deliver targeted experiences. In his session at @ThingsExpo, Lou Casal, Founder and Principal Consultant at Practicala, discussed how the Internet of Things (IoT) has accelerated our abil...
Aug. 24, 2016 01:45 AM EDT Reads: 1,878
With so much going on in this space you could be forgiven for thinking you were always working with yesterday’s technologies. So much change, so quickly. What do you do if you have to build a solution from the ground up that is expected to live in the field for at least 5-10 years? This is the challenge we faced when we looked to refresh our existing 10-year-old custom hardware stack to measure the fullness of trash cans and compactors.
Aug. 24, 2016 01:00 AM EDT Reads: 1,589
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions wi...
Aug. 24, 2016 12:30 AM EDT Reads: 1,885
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
Aug. 24, 2016 12:00 AM EDT Reads: 2,840
I wanted to gather all of my Internet of Things (IOT) blogs into a single blog (that I could later use with my University of San Francisco (USF) Big Data “MBA” course). However as I started to pull these blogs together, I realized that my IOT discussion lacked a vision; it lacked an end point towards which an organization could drive their IOT envisioning, proof of value, app dev, data engineering and data science efforts. And I think that the IOT end point is really quite simple…
Aug. 23, 2016 11:30 PM EDT Reads: 2,227
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Aug. 23, 2016 09:00 PM EDT Reads: 2,999