2015 could be the year of “boutique mergers”
The splashiest tech mergers are billion-dollar partnerships between industry giants. And while 2014 posted more than its share of mega-mergers, experts say that the M&A momentum could focus activity in 2015 on smaller acquisitions. Rather than learning that the usual suspects have paid inordinate amounts of cash for big names in mobile apps or cloud computing, it's likely this year will be defined by other industries taking small bites out of the tech sphere.
"What won't change however is the number of new buyers coming to the table," writes Jacob Mullins in Business Insider. "These buyers aren't your typical Silicon Valley tech acquirers, they are more traditional household companies and brands looking to embrace technology to better reach end users and create greater efficiencies within their own businesses. And their appetite for boutique acquisitions of tech companies is just gearing up."
Mullins cites companies like sportswear giant UnderArmour's purchase of MyMapFitness, publishing mainstay Hearst's acquisition of BranchOut and Capital One's acquisition of Adaptive Path as blueprints for the M&A climate in 2015. Recent mergers that don't make immediate strategic sense could be vanity purchases designed to promote an existing brand's commitment to innovation, or provide opportunities for service integration down the road.
If you're hoping to sell your company in 2015, you might need to rethink your strategy. Rather than shopping around to prospects in the tech realm, other corporations might have a vested interest in acquiring your tech firm to boost their service offerings. From yogurt companies to auto manufacturers, large corporations have invested resources in tech incubators designed to foster innovation. These "boutique acquisitions" expand the buyer's market to include companies that might not be on your firm's radar.