Top 5 Tech acquisitions of 2023
Aghya Goel ???
I maybe know a thing or ??? about partnerships | ROI or GTFO | Saying things that people think | Obsessed with F1, food & pole | Tell your ?? I said “Woof”
? Summary:
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The acquisition and VC market has been at an all time low this year. However, it didn't stop the industry from witnessing some of the biggest acquisitions of all time.?
One reason deals were getting smaller this year was that buyers were less willing to bet on future growth, and so ratios of enterprise value to revenue were getting smaller.
In the world of startups & scale ups - The exit strategy is indeed one of the most important. Great exits make for amazing stories and more importantly higher recognition both financially and rhetorically.
So with that setting of the scene - Lets go
The top of the chart is the acquisition that has been rolling the grounds of multiple nations for months now.?
Yeahh.. If you’re a gaming fan you've already guessed it by now
Microsoft - Activision Blizzard?
How much >> $68.7 Billion
Why >> Microsoft aims to uplift an industry that is often underappreciated, despite holding the biggest chunk within the entertainment sector - Gaming
Here is what we got to hear from the leadership >> ?
Bobby Kotick, CEO, Activision Blizzard - , “For more than 30 years our incredibly talented teams have created some of the most successful games. The combination of Activision Blizzard’s world-class talent and extraordinary franchises with Microsoft’s technology, distribution, access to talent, ambitious vision and shared commitment to gaming and inclusion will help ensure our continued success in an increasingly competitive industry.”?
WOW.. these heavy words! Anyways..Bobby Kotick will remain in place to help with the transition until the end of 2023 only! ??
Story >> The deal is Microsoft’s LARGEST acquisition ever, ~1.5X of the $26 Bn it paid to acquire LinkedIn in 2016. The acquisition required 20 months of continuous battles with regulators in the UK and US. In October Microsoft finally closed its Activision Blizzard deal after defeating the FTC in a US federal court & restructuring the deal to appease the Competition and Markets Authority (CMA) in the UK. ?? It shows that the already competitive landscape is going to continue to see major investment, and the growth of cloud gaming could pave the way to make gaming even more accessible.?
For investors, that’s a recipe for some potentially attractive returns ??
Next up ??
Cisco - Splunk?
How much >> $28 Billion cash
Why >> To help organizations become more secure in an AI-Powered world
Here is what we got to hear from the leadership >>
Chuck Robbins, Chair & CEO of Cisco - , "We're excited to bring Cisco and Splunk together. Our combined capabilities will drive the next generation of AI-enabled security and observability. From threat detection & response to threat prediction & prevention, we will help make organizations of all sizes more secure and resilient."
Story >> Cisco’s $28 Billion in cash or $157/share offer for enterprise cloud protection company Splunk is one of the BIGGEST enterprise software deals in 2023. Splunk, a cybersecurity and data analytics firm, was in the process of shifting its business model from licensing to subscriptions when it suddenly announced an agreement to sell itself to Cisco. ??
Cisco and Splunk's complementary capabilities provide observability across hybrid and multi-cloud environments enabling customers to deliver smooth experiences that power digital businesses. Cisco and Splunk are both well positioned to help customers responsibly harness the power of AI given their scale, visibility into data, and foundation of trust. The union of these two organizations will allow for more investments in new solutions & increased global scale to support customers across the board..
The acquisition builds upon both companies' reputations for being purpose-driven with similar values, strong cultures, and incredibly talented teams. It also unites two "Great places to work" with a shared passion for innovation.
Silver Lake & CPP - Qualtrics
How much >> $12.5 Billion
Why >> SAP and qualtrics were never a cultural fit. (This was a long time coming!)?
Here is what we got to hear from the leadership >>
Zig Serafin, CEO of Qualtrics -? “Qualtrics has cemented its position as the leader in experience management. Our AI-powered platform is helping more than 19,000 organizations deliver exceptional experiences and build deep relationships with their customers and employees at scale.”
Story >> Historically, SAP acquired Qualtrics in 2018 for $8 billion, but the graft didn’t take, and SAP soon had to sell. On June 28 2023, Silver Lake and the Canada Pension Plan (CPP) Investment Board snapped up qualtrics - to make it join the likes of Getir, Airbnb and Klarna in Silver Lake's portfolio. SAP of course continued to be a go-to-market partner and service their joint customers.?
The markets definitely showed confidence in the deal going through, which was reflected in the share price - small ~1.5% upside, from $17.89 to the acquisition price of $18.15.
Silver Lake, in particular, is no stranger to deals of this size and magnitude. They are well-known in the industry for their $24.4 billion buyout of Dell (DELL) in 2014. At the time, this was the LARGEST technology buyout ever.
OpenText - Micro Focus
How much >> $5.8 billion
Why>> Because digital life is life?
Here is what we got to hear from the leadership >>
OpenText CEO & CTO Mark J. Barrenechea -? "I would like to welcome Micro Focus customers, partners and employees to OpenText. With Micro Focus' great products and talent, we will help organizations of all sizes accelerate their digital transformation.”
Story >> In a deal that closed on February 1st, OpenText, a $3.5 billion provider of information management software and services, acquired software vendor Micro Focus, which generated $2.7 billion in revenues in FY2022. ?? Open Text has a track record of generating increasing operating cash flows over time. In the past, it had made countless acquisitions, bumped up its debt, and paid down its debt levels with its reliable cash flows. In fact, the tech company is a free cash flow machine. Mergers and acquisitions have always been a part of Open Text’s DNA
Micro Focus was a relatively large and complex acquisition worth an enterprise value of close to US$6 billion. To get a sense of the size of the acquisition, Open Text’s enterprise value today is about US$18.8 billion.
IBM - Apptio
How much >> $4.6 billion
Why? >> Businesses are increasingly relying on technology such as cloud and AI. Product suite expansion is a must ??
Here is what we got to hear from the leadership >>
Rob Thomas, Senior Vice President, Software and Chief Commercial Officer, IBM said, "The combination of Apptio products and IBM's IT automation portfolio will give businesses a 360-degree technology management platform they can use to optimize and automate decisions across their IT landscapes,"
Story >> The big blue closed its $4.6 billion purchase of Apptio on August 10th from Vista Equity Partners - promising to marry the latter’s financial operations offerings with the tech giant’s automation and artificial intelligence portfolio. This is IBM's LARGEST acquisition since it bought Red Hat in 2019. Besides Apptio, IBM completed six acquisitions at a total of $423 million in the first half of 2023 as it looks to expand its portfolio of cloud and AI services.?
IBM promises that users can reduce cloud costs by +30% with Apptio’s Cloudability and increase reservation coverage to more than 90%. Apptio offers financial and operational IT management and optimization software and serves more than 1,500 clients, including major tech companies such as Amazon, Microsoft and Google.?
The investment is surely paying off for IBM. The software division, its largest, increased 7% from a year ago to $6.6 Bn in sales, as per 2nd quarter earnings report (July).?
Pffff that's all for today!
Before we wrap up this SaaS-y edition 2, here's a little nugget of wisdom:
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Thank you for sticking with me till the end. So here's some bonus?
Upcoming/other acquisitions interesting reads -
I hope you've enjoyed this saas-y attempt. Until next time ??
Love X
Aghya, Your friendly techie next door
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Which acquisition surprised you the most? How do you think these deals will reshape the tech landscape? What's your take on the future of AI in tech acquisitions?
?? Oh, and speaking of tech discussions, if you're in the NYC area, don't miss our (David & Is) upcoming Tech Meetup on Dec 15.!
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Interested to read more about what we discussed.
Im keeping nothing hidden >> Below links will let you dive deep into each of the acquisitions and the story behind them?
Getting channel partners to generate demand.
1 年Keep going like this Aghya Goel and I'm 100% sure that you are going to make it far ?? Love to see everything you are putting out there.