March 14, 2013

Technology evolutions lead the way in mergers and acquisitions

In the real estate market it might all be about the location, but when it comes to technology acquisitions in the business world, as long as the product or service is quality, buzz can be created around nearly any company.

As technology continues to evolve, entrepreneurs are taking advantage and creating organizations that cater to the needs of firms seeking ways to integrate everything from mobile devices to cloud technology.

Ernst & Young released 2012 data concerning mergers and acquisitions numbers, showing that cloud computing and software-as-a-service (SaaS) are dominating the field. Specifically, the cloud/SaaS trend led the rest of the pack of deals in 2012, growing to more than 15 percent of global technology M&A deal volume.

According to PrivCo, there were 100 deals for privately held tech companies in New York alone, with their value adding up to $8.3 billion. California's Silicon Valley continued to lead the way for cities when it came to technology mergers and acquisitions. The Golden State had 226 deals for a total of $21.5 billion.

CB Insights CEO Anand Sanwal explained to Crain's New York Business that he expects the overall trend of technology mergers and acquisitions to continue through 2013.

"Tech companies have a lot of money on their balance sheets, and there are a lot of non-tech companies that are being forced to innovate," he said. "One way they can innovate quickly is by acquisition."

Sam Hamadeh, CEO of Privco added that 2012 was the most active year as a whole for the tech M&A market since PrivCo started monitoring deals. With 2,357 transactions worth $112 billion, it was a 22 percent increase from 2011.

With companies across the nation showing an increase in technology mergers and acquisitions, having a comprehensive acquisition strategy can help businesses work toward finding the best deal possible.