Survey: IoT, Big Data, Mobility Drove Record Q2 M&As
Corporations looking to tap into the growth of the Internet of Things (ioT), expand smart mobility solutions and add high-performance cloud data centers fueled record M&A value and growth during the second quarter.
Corporations looking to tap into the growth of the Internet of Things (IoT), expand smart mobility solutions and add high-performance cloud data centers fueled record M&A value and growth during the second quarter.
The combined value of disclosed deals in Q2 hit $127.2 billion (65 percent sequential and 142 percent year-over-year increases), higher than any quarter since 2000, according to EY’s Global Technology M&A 2Q2015: First Look. M&A volume rose 16 percent year over year.
In other Q2 M&A highlights:
- 15 deals topped $1 billion, including three above $10 billion.
- Average value per deal—which has never reached $400 million, even during the dotcom bubble—climbed to an all-time high of $563 million.
- Q2 deal volume of 1,014 beat Q1 volume, topping 1,000 for the first time since Q4 2000 and setting a sixth consecutive post-dotcom-bubble record.
- Strategic technology deal drivers remained strong, especially in security, but “consolidation” was the Q2 watchword.
Semiconductor and communications equipment companies led the transformative consolidation deals as those and other tech companies sought scale and diversity to leverage digital disruptions and prepare for associated growth.
Nine transformative technology segments (along with their approximate deal values and number of deals) drove an average of 40 percent of Q2 M&A:
- Big Data ($450 million-$550 million, 100)
- Payment and Financial ($350 million-$450 million, 70)
- Cloud/SaaS ($250 million-$450 million, 350)
- Smart Mobility ($200 million-$300 million, 225)
- Advertising and Marketing ($200 million-$300 million, 125)
- IoT, Gaming and Security (each: $150 million-$225 million, 30)
- Health care ($10 million, 60)
Seven of those technologies are at least 33 percent ahead of last year’s quarterly averages and four—security, IoT, health care and cloud/SaaS—have already passed their full-year 2014 value, according to the report.
Big-ticket consolidation deals also pushed Q2 M&A values to new post-dotcom-bubble values. One deal in Q2, valued at $127.2 billion, stood between Q2 and the record holder for the highest M&A aggregate value: the AOL-Time Warner $160 billion blockbuster in Q1 2000.