Acquisitions by industry leaders was the theme of the month, with several big names in their respective fields — AOL, nVidia, Novell, Sun, Dell, Intel, ACS and HCL taking the inorganic route. The month of February saw 28 deals in IT and Business Process Outsourcing (BPO) sector globally with a total value of $4.4 billion (including the month’s blockbuster deal of Reed Elsevier acquiring Choice Point for $3.5 billion). When compared to previous month, the number of deals in February has subdued by 15 percent, but the average deal size excluding the billion dollar deals for both the months stands slightly higher at $33million. The slow pace of American economy (as a result of its melting macro economic factor) could not reduce the pace at which U.S. firms are slating out their acquisition goals. In February, U.S. again dominated the M&A space with 16 domestics and six cross border deals with cumulative value of around
$4.2 billion.
Majority of deals were in IT software space, where the sub segments were virtualization softwares, compliance softwares, analytical tools and email management software. Sub categories in BPO were legal process outsourcing, staffing services and recruitment processing services. This month acquisition in gaming segment were not purely for game development but to strengthen the acquirer’s existing business line such as Autodesk acquired AGEIA Technologies, a provider of gaming physics technology, to add new products in its 3-D and other product portfolio.
Now talking about the month’s blockbuster deal, Reed Elsevier acquired Choice Point, a provider of information, analysis and distribution solutions based in the U.S. The acquisition is a part of Reed’s massive restructuring plan where the target is set to leverage on and expand its online information and workflow solutions. As a part of reshaping its business line, Reed has also divested two of its business divisions in order to achieve significant cost efficiencies.
Novell acquired two firms in the U.S., SiteScape for an undisclosed amount and PlateSpin for $205 million. Both the firms have been acquired by Novell to expand its product portfolio and accelerate its revenue growth in potential virtualization space.
The U.K. firms followed the U.S. with four domestic deals totaling to $56 million. The deals were primarily in the IT software, recruitment processing and Internet services space.
The target geographies also have a similar trend with 17 firms acquired in the U.S. totaling to $4 billion, followed by the U.K. where seven firms were acquired totaling to $257 million. Other geographies targeted were India, Germany, France and Australia.
| Mega M&As of Feb. '08 |
| Acquirer |
Target |
Area |
Deal size ($Mn) |
| Reed Elsevier |
ChoicePoint |
Provides information, analysis and distribution solutions |
3,500 |
| Novell |
PlateSpin |
Virtualization management software and services provider |
205 |
| GFI Group |
Trayport |
Provides electronic trading software for brokers, exchanges and traders in the commodities, fixed income, currencies and equities markets |
164 |
| DELL |
MessageOne |
Email-management software provider |
155 |
| HCL Technologies |
Capital Stream |
Processing solutions to commercial banks and finance companies in North America |
40 |
| Ipreo |
CapitalBridge |
Market intelligence, analytics and investor relations solutions provider |
32 |
| Statpro Group PLC |
Performa Consultants U.K. |
Supplier of software solutions to asset managers for complying with Global Investment Performance Standards (GIPS®) |
14
|
| Masternaut Three X |
FibreCity |
Internet service provision |
12 |
| Art Technology |
CleverSet |
e-commerce optimization services provider |
9 |
| ACS |
Bowers & Associates |
Healthcare management services |
8 |
| Trintech Group |
Movaris |
Firm provides financial governance and compliance software tools |
5 |
| LexisNexis |
Axxia Systems |
Provider of back-office and integrated services to the U.K.'s mid-law segment |
NA |
| GlobalLogic |
Validio Software |
Software development company |
NA |
| Adecco India |
Ajinkya |
Niche staffing firm |
NA |
| Accruent |
Famis Software |
Developer of Integrated Workplace Management Systems (IWMS) |
NA |
Intercontinental
Exchange |
YellowJacket Software |
Financial technology firm that operates an electronic trade negotiation platform offering a range of trading tools including instant communication, negotiation and data |
NA |
| Autodesk |
AGEIA |
Technologies Provider of gaming physics technology |
NA |
| Workday Inc. |
Cape Clear Software |
An Enterprise Services Bus (ESB) provider |
NA |
| Novell |
SiteScape |
Open source team collaboration solution provider |
NA |
| Sun Microsystems |
Innotek |
Provider of open source virtualization software |
NA |
| FatWire Software |
Future Tense Sols |
Australian-based reseller |
NA |
| BT |
Fresca |
Provider of managed and hosted e-commerce service |
NA |
| Alexander Mann Solutions (AMS) |
Capital Consulting |
RPO |
NA |
| EMC Corporation |
Pi Corporation |
Developer of software and provider of services for personal information management |
NA |
| Intel |
Offset Software |
Game development |
NA |
| Source: Tholons; acquisition deals signed between Feb. 1st to feb. 29th 2008 |
