IDC Finds 2010 to be a Turnaround Year for M&A Activity in the Technology Sector with Deal Volume and Valuation on the Rise
FRAMINGHAM, MA – March 28, 2011 – Merger and acquisition (M&A) activity in the information and communications technology (ICT) sector made a strong recovery in 2010 as the global economy and IT spending rebounded from the recession of 2008-2009. According to a new International Data Corporation (IDC) report, there were more than 1,900 M&A deals in the ICT sector in 2010 with a total valuation of over $200 billion.
The vast majority of M&A deals in 2010 were concentrated in application-related areas, including enterprise applications (586 deals) and Internet applications (421 deals). Activity also surged in the infrastructure segment where there were more than 219 deals led by strong interest in security and storage companies.
From a valuation perspective, the telecommunications segment was particularly active in 2010 with seven of the year's top 10 megadeals involving service provider networks. Among these megadeals was CenturyLink's acquisition of Qwest for $22.4 billion and América Móvil's $21 billion deal for Telemex. Intel's $7.7 billion deal for McAfee and SAP's acquisition of Sybase ($5.8 billion) were the largest megadeals in the infrastructure segment.
The most active companies on the M&A landscape were Google, which made 27 deals in 2010, followed by AOL and Facebook with 9 deals each. Among the major IT vendors, Cisco, Dell, HP, IBM, Intel, Oracle, and VMware all displayed a renewed appetite for acquisitions.
"The renewed confidence accompanying the recovery in IT spending helped to make 2010 a turnaround year for technology M&A activity," said Dan Yachin, research director, Emerging Technologies at IDC. "Looking ahead, IDC expects 2011 to be another active year as companies make strategic investments in a variety of critical areas, such as converged infrastructure, mobile content, service creation and enablement, data analytics (and the supporting infrastructure), and pervasive computing."
The IDC report, 2010 Tech M&A Analysis Report (IDC #227144), is the first study to provide an overview and analysis of M&A deals across all segments of the ICT industry, including enterprise IT infrastructure, telecommunications, enterprise applications, IT services, semiconductors and components, Internet, and mobile. It also discusses the different business, financial, and technology trends affecting M&A activities in the ICT industry.
The 2010 Tech M&A Analysis Report is the first in a new series of quarterly reports, live deal alerts, and online database enhancements covering M&A deal activity in the ICT sector. Each quarter IDC will publish a new M&A analysis report coupled with a data file tracking every tech deal during the previous quarter. These reports are accompanied by an online M&A deals and private company database, and email alerts featuring "daily deals" analysis. These deliverables are designed to assist a variety of audiences, including investors, IT sourcing and strategy professionals, enterprise technology organizations, and government agencies. The M&A Analysis report series is part of IDC’s Private Vendor Watch Service (PVWS).
"IDC recognized the need for comprehensive, timely deal analysis coupled with a clear understanding of the impact these deals have on markets, buyers, and investors," said Ryan Patterson, program manager, IDC's Private Vendor Watch Service.
About IDC's Private Vendor Watch Service
IDC's Private Vendor Watch Service combines unbiased intelligence and analysis on private emerging technology companies, M&A deals, and markets. Whether you are looking to make an investment in a tech company, find potential acquisition candidates, make technology purchase decisions, find comparable deal values, or learn about future competitive threats, IDC's Private Vendor Watch Service has critical information and analysis you can’t find anywhere else.
To learn more about IDC's Private Vendor Watch Service and M&A analysis, please contact your IDC Account Manager or Ryan Patterson firstname.lastname@example.org.